Schemes, Scams, Frauds.
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Fraudulent and Misleading Credit Card Offer ScamsYou get an ad in the mail which states, among other things, "You have been APPROVED for a $2,500 unsecured credit line from the Financial Card Division of DDQ based on the information we have on file regardless of past credit. Your Approved credit line of $2,500 for credit purchases and cash advances will be available once you receive your CashPlus Card just by calling now." The ads contain small pictures of a VISA, MasterCard and a CashPlus card on the upper right hand portion. "YOU ARE APPROVED" FOR A PREMIER CONSUMER CREDIT CARD $2350.00 Immediate Line of Credit - Guaranteed!!! Get sponsorship for your very own Master Card - Regardless of your credit situation!! YOU ARE APPROVED - YOU CANNOT BE TURNED DOWN!! Excited, and eager to shop, you respond to the ads by calling the telephone number listed. The salespeople there continue to represent that you have been approved to receive a credit card and a $2,500 line of credit regardless of your credit history. You are also informed that you will receive a VISA or MasterCard. You are asked to pay a $149.95 fee for the credit product, either by having your checking account debited or by charging it to a pre-existing credit card account. After providing the information, your checking account is debited via an unsigned bank draft. Expecting your new credit card you finally receive a package of materials from DDQ that disclose, for the first time, severe limitations on your ability to use the credit products promised. You do not receive a major credit card in the package. Instead, you receive a mail-order catalog together with a charge card, good only for ordering items from the catalog. You are informed that you will only receive an application for a major credit card if you first purchase $400 worth of merchandise from the catalog. The $2,500 line of credit, calculated at extremely high rates of interest, applies only to the use of their "CashPlus" credit card (which is not a general credit card, but a "single-use credit card" which can only be used to purchase items from their catalogues); the cash advance is limited to only $10; and their CashPlus card can not be used in any ATM machines. After you've ordered the amount required from the catalogue for grossly overpriced, low quality merchandise you find that the sponsorship for a major bank card consists only of a form to request a regular application for a VISA or MasterCard which you must send to a bank along with the good credit history they require. Old and Poor, You Qualify! The targeted victims of a similar operation were primarily the elderly who relied on Social Security or fixed retirement incomes for support. The telemarketers would call and say that you had been pre-approved for a low interest debt consolidation loan or a low interest rate credit card. "Because of your established credit history, you may now be eligible to apply for a new card with a rate as low as 7.9%. Would this be helpful to you, or do you pay your balances in full every month?" The low interest rates were supposedly guaranteed for five years and you simply needed to pay the agent a fee of between $199 and $499 to receive the loan or pre-approved credit card. "After consulting our "interest savings chart" we can determine that your annual savings will more than cover the one time activation fee of only $385." You are further told that they would process all of the required paperwork for you and if you were dissatisfied, there was an absolute money-back guarantee. For your "protection" they pass you on to a verifier who tape record your acceptance of the terms. "Do you think we would risk losing our status with credit card companies for a few hundred dollars?" In reality, all you would receive was a blue folder which contained a listing of ten to fifteen institutions that you could apply to for loans or credit cards on your own. The victims of this one scam were, collectively, defrauded out of $2.2 million dollars while the owner of the operation got twelve and a half years worth of prison credit. A former employee suggests that there are still over 70 of these low interest offices operating in Montreal with one organizer running at least 12 offices, shifting between various locations every few months. "The leads are recycled on a regular basis, often stamped with the names of other offices, some of which have been promoting bogus Credit Card Protection offers." These operations find that people having credit problems can be convinced to send their last dollar for loans or credit cards that they will never receive. Don't pay up front unless it's a secured card which requires a deposit to cover any charges made. Teasers, Not Pleasers Some companies with low-rate teasers, promising relief from excessive rates, offer to transfer your balance at rates such as 6.9% for six months. Quite often this special rate may be for future "new" charges only, not the transfer. Or the reverse may apply with a high rate on all new purchases, but either way you could be worse off than before if the total new rate is greater, or you increase your credit spending due to a temporary reduction in monthly payments. Some identity theft scammers will call with a fantastic offer which involves switching credit card companies but is actually a ruse to obtain your credit card info or other personal data for their own unauthorized use. ANYONE CAN QUALIFY FOR A
MAJOR CREDIT CARD! * Make the call NOW and get the credit
you deserve! Some companies deceptively advertise major credit cards through television, newspapers, and postcards which lead you to believe you can get a card simply by calling the number listed. Sometimes the number is a '900' number service, for which you are billed just for making the call. Ads like this promoting secured credit cards may appeal to you if you have a poor credit history or no credit at all. And while secured credit cards can be an effective way to build or re-establish your credit history, some marketers make deceptive advertising claims to entice you to respond to their ads. Both secured and unsecured cards can be used to pay for goods and services. However, a secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured, or more standard, card does not. Typically, a secured card requires an annual fee and has a higher interest rate charge than an unsecured card. Your credit line is then a percentage of your deposit, typically 50-100%, which may range from a few hundred to several thousand dollars. In addition, you also may have to pay application and processing fees —sometimes totaling hundreds of dollars.
Don't Just Spend, But Earn As Well "$5,000 unsecured credit card, 6.95%
rate, GUARANTEED APPROVAL When you receive an e-mail that offers you a "major" credit card regardless of your credit history it can be hard to resist. The offer may claim that the card will be issued by an "offshore" bank, and that nobody is turned down. It also may offer a "business opportunity" that promises astounding earnings. A variety of such schemes have defrauded more than ten thousand consumers nationwide doing business under a series of assumed names, promising consumers that in return for the payment of a fee in advance, they will receive a major credit card with a high credit limit. Sometimes they are combined with pyramid schemes, which offer you an opportunity to make phenomenal amounts of easy money simply by attracting new participants to the scheme. CROSS BORDER CREDIT CARD SCAMS PREY ON NY CONSUMERSIn a major effort to combat international credit card scams, New York Attorney-General Eliot Spitzer announced April 20, 2001 a series of lawsuits against Canadian companies accused of illegally obtaining $5 million U.S. or more from thousands of financially-strapped consumers in New York and other states who were lured by false promises of easy access to a Visa or MasterCard credit card. "All too often, debt-burdened consumers are targeted with solicitations for financial products and services, " Spitzer said. "These companies clearly are not in business to help consumers. Instead, they are seeking to profit from the financial problems of others." The lawsuits accuse three Montreal-based companies of engaging in deceptive, fraudulent and illegal business practices after consumers complained that the companies deceived them into paying approximately $200 in advance for an all-purpose credit card such as a Visa or MasterCard. Instead of providing the promised credit cards, these companies sent consumers so-called "financial benefits" packages which were of little or no interest to the consumers. Some received a catalogue for purchases and vacations, others received high-fee credit, and others were snared in financing that could result in their losing items posted as collateral. Many consumers received nothing at all for their payment. Stating that customers who are dissatisfied receive refunds, lawyer Joel Hirschhorn said Alini allows consumers to improve their credit ratings by using the company's card, enabling them to apply later for a Visa or MasterCard and that the lawsuit is a combination of the attorney-general being overzealous (and) people not being aware of what they're signing. A company spokesman stated, "None of the attorney-general's allegations is true. We're a completely above-board operation. We have recordings of all our phone calls to prove it." The lawsuits are as follows: Alini International Marketing, Inc., and its officers Nicole Bertrand and Neil Haboush, are accused of running an advance fee credit card scam since at least December 1999. Instead of sending a promised credit card, they sent a package containing: a catalog from which consumers could purchase overpriced merchandise in installments; a credit repair manual; and a promise that the consumers would be approved for a major credit card after making consistent timely payments to Alini. Alini International Marketing Inc. www.alini.net since 11/10/99 Admin. contact: Bertrand, Nicole (NBR22) alini@TOTAL.NET Publicly traded Telehublink Corporation, doing business as Triple Gold Benefits, and its general manager Jacques Dion, are accused of tricking consumers into paying almost $220 for credit cards, but instead providing cash-strapped consumers with a booklet purporting to enable them to purchase goods and services at discounted prices. Customers also received a merchandise catalog, a credit repair manual, and applications for credit cards from unrelated financial institutions. Telehublink Telehublink domain name: www.afsecurity.com since May 2000 Admin Contact: Sherry Greenspon, (SGO189) sherry@MAIL.PLATINUM2000.ORG The chief corporate officer of Telehublink, Off-Track Betting Corp. chairman David Cornstein, who is expected to announce his candidacy for state controller in June, said "I'm not on top of it," regarding the company's telemarketing in Montreal. He said Telehublink's main business is developing encryption technology, which maintains the security of electronic data. Told that Spitzer had outlined instances of consumers being scammed by Telehublink, Cornstein said he plans to sever his ties with the company though he apparently holds more than 1.9 million shares of stock. Telehublink's President Bruce Young said: "We don't take advantage of anyone." adding that the telemarketing arm of the business is "so far down on the food chain, I don't even think [Cornstein] would know about it." Young said the company fielded 21 consumer complaints after sending out 58,000 packets of discounts and information that he said were valued at $6,500 each. This is contrary to claims that such financial benefits packages were of little or no interest to the consumers. TELEHUBLINK CORPORATION (THLC3-DOM) Domain Name: www.thlc.org Sept 2000 Admin Contact: "3557561 Canada" Inc., doing business as Platinum 2000, Continental Benefits Group and the Alliance for Family Security, and its president Shawn Jacobs, are accused of running a fraudulent operation tricking consumers into paying between $150 - $200 for credit cards between the Fall of 1999 and the Spring of 2000. Instead, consumers received "free" airline tickets with the purchase of a vacation package, a list of creditors to which consumers could apply for credit, credit card applications, and a credit repair manual. Telebank (Platinum 2000 Inc.) (PLATINUM18-DOM) www.platinum2000.org Sept/99 Administrative Contact:
Director Since Nov 98
Directors
To give the appearance of legitimacy, each company represented that its business was located in upstate New York. However, all three firms merely rented post boxes in either Plattsburgh or Champlain. The Attorney General is seeking refunds for consumers who were victimized by the companies’ deceptive and illegal practices. He is also requesting that the court bar the Canadian companies from operating in New York State unless they post performance bonds to secure funds in the event of future consumer problems. While the lawsuits also seek civil penalties and court costs he is not pursuing criminal charges, saying it might be difficult to secure that level of evidence, and a civil judgment would get compensation faster. These cases are being handled by Assistant Attorney General Mark Fleischer of the Consumer Frauds and Protection Bureau. Individuals with questions or concerns about advance fee credit cards are encouraged to contact the Attorney General’s consumer help line at (800) 771-7755. 09/01 - The Toronto Strategic Partnership arrested three people after concluding an investigation into a fraudulent telemarketing company VIP promotions / US Credit Services which offered "Low Interest Rate Credit Cards" to U.S. citizens. The victims were told or it was implied that their current, high interest, major credit card could be exchanged for a low interest rate Visa or MasterCard credit card upon receipt of the processing fee of $199 USD. They were told that, by using the low interest card, they would actually save more than the $199 in interest payments in one year alone. The material that was eventually sent consisted of nothing more than a dropbox application form from any bank which offers low - interest major credit card accounts so really all the victims got for their processing fee was a useless blank application form. Estimated victim losses are in excess of $100,000. Charged with fraud over $5,000 are Leonora Khan, 48, Marlo Delucia, 28, and Marc Thibeault, 35. Defendant Not Given Any Credit 10/03 - A federal jury has found a defendant guilty of conspiracy to commit wire fraud, according to the office of the U.S. Attorney Southern District of Florida. The office identified the defendant as Lanette Black, who was manager of Amansco Credit Services, which was in Deerfield Beach before the Federal Bureau of Investigation closed it for telemarketing fraud. "Black was found guilty of conspiring to commit a vast telemarketing fraud between two companies, Franklin Credit Services and Amansco, which billed customers over $1 million in 1998." The government established at trial that Franklin and Amansco defrauded more than 5,000 customers around the United States during the period 1997 and 1998. The government put the total amount of the fraud at more than $2.7 million. Before trial, eight Franklin salespeople pleaded guilty, including James Michael Christensen, who the government said organized the scheme to defraud. Christensen is currently serving 54 months in federal prison. Scamburg Solicitations 11/26/01 - Although no charges have been laid, dozens of workers were sent home after federal agents raided the Schaumburg offices of Rockwell Holdings Inc., at 1002 E. Algonquin Rd., whose telemarketing operation had generated over 750 consumer complaints with the BBB in Chicago and Northern Illinois over just a two month period and 1,533 since the start of the year. Most of the complaints allege that Rockwell or affiliated companies promised to send a credit or debit card plus coupons for hundreds of dollars worth of free gasoline, clothing, trips or other items. Consumers typically said they paid $149 or more for the card and gift package, plus a monthly fee of about $14.95, but did not receive the card or the gifts. Apparently topping the Illinois record for telemarketing fraud, the companies are now accused, in a joint FTC and AG lawsuit, of scamming tens of thousands of customers out of tens of millions of dollars by targeting people who were trying to rebuild their credit. The company names that the Better Business Bureau considers to be affiliated with Rockwell Holdings include Card Services, American Benefits Club, Rockwell Holdings Benefit Club, First Choice and First Financial Consulting, Consumers Club of America, Nationwide Membership Club, First Financial Solutions and Continental Membership. Records indicate that sixteen different companies use the same post office box in Rolling Meadows -- P.O. Box 8010 -- that Rockwell has used. The FBI indicate that the firm is run by John C. Morgan and Michael Cooper. The suit also named as a defendant John F. Boone, of Algonquin, who state records list as president of Rockwell Holdings. No criminal charges have yet been filed. Despite having obtained refunds for 128 customers it did not appear that Rockwell had changed its way of doing business but did agree to stop claiming membership in the BBB. FTC v. 1st FINANCIAL SOLUTIONS
FTC V. FIRST CREDIT ALLIANCE, No. 300 CV 1049 (D. Conn.)
Credit to Party Thanks for a great site. There are two companies I'd like to ask you about, Party Lite and Credit Solutions Association. My sister-in-law is a Party Lite consultant, anything good or bad about them? I'm currently working very part time with Credit Solutions in Sacramento, CA (their corporate headquarters are in Walnut Creek, CA). We put boxes out at retail locations that say Credit Problems? Get a Visa Card. Applicants phone or mail in. Then they are set up for an appointment and asked to bring a $47 application check or money order, proof that you earn $1000 a month, proof of residency and a void check. The Visa is from CorTrust, Mitchell S.D. (I called them today and they have processed 1500 apps from the company and only 8% have been turned down). The Visa is an unsecured card with a $300 limit and the small print says it'll increase by $100 every 4 months if regular payments are made. After approval, you're charged $59 thru an electronic transfer, then you pay $49 a month (for the first year, 2nd year is $24 per month. 3rd year is $9) to be a member of the CSA and you get to buy groceries, electronics, travel etc at discounted prices and enjoy double manufacturers warranties. You get a set of manuals re: your credit and how to restore it and a book for the shopping for the aforementioned items. You can call the office for help with the manuals. It sounds a tad fishy to me but it doesn't really match your credit report scam on your site. Any help you can give me on these two companies would be greatly appreciated. Thanks.Jeff Viducich 09/01 While I can neither endorse or criticize currents operations that have yet to run afoul of the law I will say this. Party Lite appears to focus on product sales in its method of home party sales rather than straight recruitment. This is a good thing. Fraudulent concerns force you to stockpile products and stress that your opportunity to make money is based primarily on the supposed sales of new recruits who must pay to join the structure. As for credit card issuers, paying commission to you is probably cheaper for them than the contracted telemarketing call centers they likely also use. I can understand the aspect of minimizing risk by escalating credit limits and reducing annual fees but the introduction of application fees, buying clubs and manuals leaves me guessing as well. The ops I have covered never provide a real credit card and focus on the fraud of advance fees taken under false pretenses. I will leave the decision up to you. Les Can you help me find a list of current fraudulent credit card companies? The company I want to check out is: ADVANCED CAPITAL I was offered a credit card, VISA I think, with a $2,500.00 credit limit for a $150.00 processing fee. I was given a customer service number 1-866-416-0668 (tried it but could never speak to anyone). 02/02 After reading your website I am convinced I have been scammed. The company was not mentioned in your website but the circumstances were very similar. The company, Elite Gold, promises a $4,000 credit card, MasterCard or Visa, as well as credit to order things from their catalogue. They promise you a bonus of a no cost cell phone ( which does cost) and a satellite dish ( you get a note saying "Since this item is in such high demand we are experiencing a lack of inventory ...we will send you a certificate within two weeks) I still have no credit card even though they instantly debited my checking account for $199.00. I am now convinced that I will receive a regular application and be turned down. So I paid $199 for absolutely nothing. There are two addresses for this company . The card you get in the mail has: Elite Gold and the catalogue order form has Your Premium Benefits Do you have any info on this company? I am going to call and demand my money back. Any chance I will get it? Patricia Jenkins 10/02/01 They Kept Sweetening The Offer I find your site great. It has all of the right types of scam notifications. I encountered one just fourteen days ago when I received a phone call from a "sales person" named "Paul" from United Financial Corp. who started the call off by saying that he was responding to a credit card application that I had filled out. When I asked him, "What application?" he responded with "The one from 6 months ago". I asked him with what company and he responded, "We do not have that information." My curiosity was peaked, so I bit, even knowing that I had not applied for any cards in over a year. He offered me an unsecured Visa with a $3000 limit with a 7.0% interest rate. He further stated that along with the card which I was guaranteed to get in the mail in "exactly 7 days", I would get a 700Mhz CPU and a pre-paid Sprint mobile phone as "gifts". The offer then got even better. He also stated that "10 days after you get the Visa, you will get a secured MasterCard where all you have to do is make a deposit to receive 200% of the deposit as a credit limit." I asked if I could get the Visa and decline the MasterCard and he replied "Of course, just send it back." I asked him what the fee was and he responded "$299.00 debited from your checking account". Still curious I went ahead and bit harder. He asked for my account info (routing number and account number). Then he said, and I quote, "Now it is important that when you get your Visa card, that you call our customer service center and activate the card. The operator will give you a PIN and then all you have to do is go withdraw the $299.00 from the card and deposit it into your checking account to cover our ACH." He gave me the debit date of February 12th so I was to receive the card on February 7th if the seven day rule applied. He then transferred me to another operator to "record my authorization". Prior to him transferring me I asked him what the customer service phone number was. He gave me 1-866-480-1239 and transferred me to a sweet sounding female who "recorded" my authorization and re-affirmed the same sales pitch he gave but went further to say that I would be subject to penalties if my ACH did not clear. She gave me a tracking number and quickly said if I had any questions call 1-866-484-1239 and speak to customer service, then hung up. Note: An ACH is an electronic debit from an account commonly known as a "check debit" where an individual gives authorization to a company to debit their account using the accounts ABA (routing) number and account number. Now there I am at home thinking. 1. The male was too evasive in giving me what company I had applied
to 6 months prior. The big tip off was the customer service phone numbers which did not match. I call the first phone number and guess what? Not a working number. I call the second number and get a recording which started out in Canadian French then repeated in English. "You have reached the Canadian Sprint Phone Service answering service, if you know the extension of your party please press it now". Hmmm... yep I've got a problem to fix now. I go online searching for "cross border credit card scams" and find a task force of Canadian authorities to call at Phonebusters. There, the advisor states "So they offered you a Visa and a MasterCard, eh?... Tell me something, have you ever gone to a Ford car lot? And while you were there did you see any Chevy's for sale, also? Didn't think so. Those are two separate and competing companies which never sell back to back. The same thing applies here." Well, I really feel bad now but still go through the process of optimistically thinking the card may yet come. The seven days came and went, so I tried the second number again and actually got a customer service rep. I explain that the card has not arrived and she explains that they do not issue cards. but simply sell a list of banks that will approve people with bad credit. I tell her that their sales pitch misrepresents the facts and she rudely says "Then go stop the payment". I was lucky that I finally managed to stop the payment, without charge, on the day it appeared in my account by filling out a fraud statement with the bank. Their bank routing number is 12224287. I also filed a formal complaint with the Canadian and US authorities and hope others can avoid this scam by visiting your site. Randall Bland 02/14/02 We declared bankruptcy about 7 months ago and were looking into rebuilding our credit through either a secured or unsecured credit card; if we could find one that would accept us. I went to a couple of sites and gave some brief info to see if we qualified for anything but never got the instant results I was promised, so I just gave up and went on with life. Two weeks ago we got a call, asking for my husband, stating that he was following up on an application he had filled out. This sounded legit, since I was looking. The caller told me all we needed was the information for a bank draft of $221 which, although I thought was rather high, was supposedly for an unsecured card and besides, most sites had membership fees as well. He gave me my tracking and customer care center numbers. The next day I had second thoughts and attempted to call and ask them to cancel. No luck. I got a message saying that they were experiencing a high call volume due to a huge response to their program, my call was important to them, call back later. Which I did repeatedly, for days. Even though they posted it right on schedule I have yet to get through to actually talk to a person. I have contacted my bank and asked for any information on who the money
went to since all the transaction states is the phone number of the company
1-678-293-0133. Stupid me didn't write down the name of the company or
guy who called, and I feel like an idiot. I got the same phone call the lady in Arizona did about the $2500.00 credit card. Freedom Resource gave me my routing number also and the same customer service number. I finally got thru and told them I wanted a refund of my money but they stated they had to send me a letter to sign and then I would get a check back for the $221.95 they took out. Well, still no letter. Imagine that. How can I go after these people? The names they're operating under are. Freedom Credit Resource, Freedom Resource, Freedom Resource Inc, Freedom
Resources, The phone numbers are 678-239-0133, 678-239-0131, 678-239-5682. Taking your advice, I went to the bank today and they are reversing the ACH and putting it back in my account. I also notified MasterCard because they're using their name. Indignant in Indiana 10/09/02 I too have been scammed by Premier-One.org. I received a phone call on Saturday April 20th, 2002 telling me that I had been approved for a MasterCard with $2500 credit limit bla bla bla. My credit is worse than horrible so I fell for it, hook, line & sinker. I gave them my checking account information, the next available check # etc. I finally received my "packet" in the mail on May 23, 2002. Their written termination policy is 30 days after your "effective date" but who knows what that means. Do I have ANY recourse? Duped in Texas - Paula E. 05/24/02 Crappy Credit Cramming Card I came across your site while searching for a supposed credit card company called Premier One after a telemarketer called my girlfriend offering a MasterCard or Visa with credit limit of $2500. They requested her bank account number in order to withdraw $174.90 on a date of her choice but not until she went over the info packet they would send. As a bonus she would receive free trial offers from a list of different companies. Well she made the mistake of giving them her number and $174.90 was withdrawn immediately, no info packet was sent and no credit card. A month later $54.90 was withdrawn from a company called Ephone who had a recording of the Premier One phone call, and a month after that $99.00 was withdrawn by a company called HPP Phone Check who also had our info from Premier One. Of course we have never used any of these services. They have just been using our checking account, which we are closing, as a free cash withdrawal center. Brad Jones 08/16/02 Premier One I'm from Houston and thought I was smarter than that! A credit card called U.S. Guardian called me 8/23/02 and I took the bait, hook, line and sinker. A woman named Evelyn Taitt told me I was pre-approved for a $2500 MasterCard and I jumped at the chance to get a credit card. After the man from the security department called to verify the information on the $199 debit I felt uneasy about the whole thing and found this website. I cried for awhile then called my bank to stop the transaction from going through. I hope that's all I have to do. I'm also going to make a complaint and anything else I can do to get the heartless people that are doing this!!!!! Denise Savala, Texas CREDIT EXPRESS / Platinum Express Guarantee a major credit card for an advance fee of $189 but consumers do not receive anything from Credit Express and are unable to contact the company. The firm does not respond to complaints or requests for information from the BBB such as the types of credit offered, the names of the financial institutions that issued the credit and the names of 10 people who have received credit through their program When I paid $221.00 dollars back in August to get a MasterCard credit card with a limit of $2500, Freedom in Atlanta, Ga., told me that 10-15 days after they took the money out of my checking I would get my card. It's now Sept 26/02. I kept calling and this time I was told that they are going to send me a membership kit first and that I have to sign a form because they can not issue me a card without my signature. They seemed to have no trouble taking money out of my bank account without one. Expensive Education UNITED CREDIT Credit card scam takes in victims NZ 11-03 - A global credit card scam is thought to be operating out of South Auckland as police have discovered fake credit cards are being distributed from somewhere in the region. The cards are sent out after people log on to global-goldcard.com and send away $200. They are delivered cards which do not work. When the person contacts the administrator, they are told they have been identified as a criminal, and that the money has been donated to charity. National E-Crime Manager Maarten Kleintjes believes South Auckland is just one link in the chain as the website is based in China which probably means it is part of a global organised crime syndicate. Pretty Light Sentence for a National Operation BALTIMORE -- 02/04 - A California man was sentenced to more than four years in prison for operating a national telemarketing scheme that told consumers they would receive a credit card and a preapproved line of credit in exchange for a savings club membership fee. The scheme defrauded more than 31,000 consumers of more than $3.6 million, U.S. Attorney Thomas DiBiagio announced Monday. Mark Cohn, 49, of Woodside, Calif., was sentenced by U.S. District Judge Andre Davis to 57 months in prison followed by three years of supervised release and ordered to pay a $150,000 fine, DiBiagio said. The California company Four Star Financial Services, where Cohn was executive vice president and general counsel, was ordered to pay a $1 million fine. The company filed for involuntary bankruptcy in the Central District of California in June 2003. Cohn was convicted of mail fraud, wire fraud and conspiracy last June for his role in the telemarketing scheme, which was based in Baltimore and employed telemarketing rooms throughout the country. Con artists bilked money from 100,000 people with poor credit, extracting fees in exchange for credit cards.NEW YORK (Reuters) -- A U.S. federal judge sentenced two people Friday for their roles in a $30 million telemarketing scam that targeted poor Americans with weak credit histories. Stephen Clark, a 48-year-old Canadian, was sentenced to a little more than 11 years in prison, while Raymond Payne, a former HSBC vice president, was sentenced to 70 months during hearings before U.S. District Judge Thomas Griesa in Manhattan federal court. Both were given the minimum sentences under the guidelines provided to the court. Clark, along with another Canadian, operated First Choice Tele-Services Corp., which bilked about 100,000 people with poor credit by extracting $249 to $299 fees in exchange for guaranteed credit cards, according to the U.S. Sniffing out a possible scam They also obtained the victims' bank account information and transferred funds to an account First Choice held in HSBC Bank in Manhattan, according to the prosecutors. Although some people received manuals on credit repair, none received credit cards, prosecutors said. The scheme lasted from February 2002 to October 2003, they said. Payne, who was the relationship manager on First Choice's HSBC account, hid the scheme from his superiors and advanced it by selling the credit manuals to First Choice, according to prosecutors. "I am extremely remorseful and embarrassed," Clark said during the hearing as his wife watched. "I am a broken man, who is about to return to prison." The judge denied his request for time before he surrendered to start his sentence. Clark's wife started crying as he was taken away. In September, Clark admitted to one count of conspiracy to commit wire fraud and mail fraud and one count of conspiring to launder money. He faced up to 20 years in prison plus fines on each of the two counts, but prosecutors and Clark had agreed on a prison sentence of between 11-1/4 to 14 years. Payne pleaded guilty to one count of conspiracy to commit wire fraud and mail fraud in August. The charge carried a maximum sentence of 20 years in prison, but the court was suggested a term of 70 months to 87 months. A third defendant, Leslie Pinsky, is in Canada and has not been extradited yet. Four convicted in $10 million credit card scam 04/06 - KANSAS CITY, Mo. The co-owner and three office managers of a telemarketing firm have been found guilty in Missouri of defrauding thousands of people out of more than ten (m) million dollars. One of the defendants convicted in federal court in Kansas City was 29-year-old Zachery Whitehill of Sahuarita (sow-rah--REE'-tuh). He was co-owner of the telemarketing firm, called Gecko Communications. Prosecutors say Gecko contacted people with poor credit, offering a major credit card in exchange for a payment of 219 dollars. Many of the customers received only a credit card application, and none received a card. Whitehill faces up to 45 years in federal prison without parole, plus a fine up to one and one-quarter (m) million dollars and restitution. Five other people pleaded guilty earlier in the scheme, which prosecutors say defrauded an estimated 50-thousand people nationwide from 1999 until Gecko was shut down in 2001. One pleads guilty in telemarketing case By Scott Wartman 01/06 - NEWPORT - One of two brothers from Fort Thomas charged in an international telemarketing scheme pleaded guilty Tuesday in Campbell County Circuit Court to three felony violations of Kentucky telemarketing statute. Brian Hunt, 35, reached a plea agreement with the Kentucky attorney general's office and agreed to pay $60,000 restitution and serve six months home confinement and three years probation. He will be sentenced March 20. The scheme bilked $3 million from thousands of victims across the country from November 2003 to August 2005, the Kentucky attorney general's office said. Telemarketing firms from India and Canada would offer victims credit cards and grants for a fee, usually ranging from $199 to $299, according to the attorney general's office. Brian Hunt and his brother, Matthew Gordon Hunt, 29, helped form a front company, Mountain Peak Financial, in a Fort Thomas condominium to launder the money outside the United States, the attorney general's office said. Matthew Hunt pleaded not guilty to four felony violations of Kentucky's telemarketing statute and two counts of receiving stolen property. He will have a pretrial hearing Jan. 20. The telemarketing fraud targeted people with bad credit and victimized many elderly people, said Todd Leatherman, executive director of the office of consumer protection for the attorney general. Many of the victims received restitution from their banks if they disputed the charges, Leatherman said. Recovering much more than the $60,000 paid in restitution is unlikely, Leatherman said. Working with agencies in Canada and India to recover defrauded funds is difficult. "You find that law enforcement are overwhelmed with requests like this and don't have the resources to respond," Leatherman said. "The telemarketers go to Canada, but they don't call Canadians. Because Canadians aren't being ripped off, they aren't devoting the resources to it." Leatherman said people should practice caution when using their credit card or bank account numbers. People should also check their bank-account statements carefully, he said. Any suspicious activity should be reported to the attorney general at (888) 432-9257. Federal
Trade Commission v. 1st Beneficial Credit Services, et
al. Federal Trade Commission v. Assail, Inc, et al. Federal
Trade Commission v. Brent Chivers Federal
Trade Commission v. Corporate Marketing Solutions, Inc. et al. Federal
Trade Commission v. Efficient Telesales Services Inc., et al. Federal
Trade Commission v. Thomas Gregg Holloway, First Freedom Financial
Corp., et al. Federal
Trade Commission and State of Washington v. Westcal Equipment, Inc.,
et al. Real or Rip-off? To put into perspective how easily it is for scammers to emulate real credit card offerings take note of just how many legitimate call center operations are reaching out daily to consumers on behalf of the major card companies. As these numbers do not even include all operations, it becomes evident that consumers would not be surprised or particularly wary of such a solicitation.
More info on Credit Card options and scams available at EyeOnCredit Opting Out of Credit ReviewsConsumers need to monitor their credit score since insurance companies use it to accept or deny auto and home coverage and as a factor in calculating premiums. People don't realize that those numerous credit card offers they receive in the mail actually erode their credit score even when the consumer doesn't accept the card. The system doesn't distinguish between companies reviewing reports as a way to search for reliable new customers and a person in financial trouble who is repeatedly applying for credit from those same companies. A phone number (1-888-567-8688) allows people to opt out of allowing review of their credit history without permission. About 70 percent of credit reports contain mistakes. About 30 percent contain errors negatively affecting the credit score and, as a result, insurance premiums. To check a credit report, consumers should call the three main providers: •Equifax, 800-525-6285 or www.credit.equifax.com. •Experian, 888-397-3742 or www.experian.com. •Trans Union, 800-888-4213 or www.transunion.com Two firms provide credit score information: •Choice Point at 800-342-5339 or www.choicetrust.com. •Fair Issacs at www.myfico.com. People should scrutinize their reports for unknown credit listings as well other bills and statements for suspicious transactions. |
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