Canadian-based Telemarketer Banned from the Credit Card Protection Business

The Tracker Corporation of America, and its president Bruce Lewis, have agreed to be permanently barred from engaging in the credit card protection and credit card registration business as part of a settlement with the FTC. Tracker sold a credit card protection program to consumers for a fee of $189, representing that consumers would receive protection of up to $10,000 for any losses resulting from the unauthorized use of their credit cards. The FTC alleged that Tracker's telemarketers, during their sales pitch, violated the FTC Act and the Telemarketing Sales Rule (TSR) by making false or misleading statements to induce consumers to purchase Tracker's services. The settlement also prohibits the defendants from making any misrepresentations of fact material to a consumer's purchasing decision.

The Tracker Corporation of America, doing business as "Consumer Protection Services," is a Delaware corporation with offices in Smyrna, Georgia and New York City. Tracker also has operated in Toronto, Canada through a wholly-owned Canadian subsidiary. Tracker contracted with independent telemarketing companies located throughout the U.S. and Canada to market its credit card protection program.

In September 1997, the FTC filed a complaint in federal district court alleging that Tracker's telemarketers falsely represented to consumers that they were calling from, or on behalf of, the consumers' credit card issuer. The FTC also alleged that Tracker falsely stated that to avoid liability for unauthorized charges consumers only had 48 hours to report loss of a credit card, or its unauthorized use. In fact, federal law limits consumers' liability for unauthorized charges to $50 per credit card, and there is no specified time limit for reporting loss, theft, or unauthorized use of a credit card.

The settlement bans Tracker and Bruce Lewis from selling credit card protection or registration programs. The order prohibits them from future violations of the TSR, from misrepresenting affiliating with any consumer credit card issuer, misrepresenting any consumer legal rights or obligations, or misrepresenting any other material fact to consumers. The order also prohibits the defendants from disclosing information about consumers that purchased credit card protection from them.

Finally, the settlement contains other recordkeeping requirements to assist the FTC in monitoring the defendants' compliance with the settlement.

The Commission vote to authorize staff to file the proposed settlement was 4-0. The stipulated final judgment and order was filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on July 28, 1998. The Office of the Ohio Attorney General assisted the FTC with this investigation.

NOTE: The stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendant of a law violation. The settlement has the force of law when signed by the judge.

Copies of the news release are available from the FTC's web site at http://www.ftc.gov and from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 202-326-2502. Copies of the stipulated final judgment will be available shortly. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(Civil Action No. 1:97-CV-2654-JEC)
(FTC Matter No. X970072)