FTC Halts International Credit Card Scam

The Federal Trade Commission has charged a cross-border telemarketing enterprise with defrauding consumers out of millions of dollars by offering them a “guaranteed” low-interest credit card for an advance fee, then failing to come through on its promise. According to the FTC’s complaint, the defendants, operating boiler rooms in the United States, Canada, and India, targeted consumers with poor credit and used promises for credit cards to trick them into revealing their bank account information. On November 17, a U.S. district court in Chicago issued a temporary restraining order halting the defendants’ illegal activities, freezing their assets, and appointing a receiver to take over their operation.

The FTC’s complaint against 3R Bancorp states that, since at least May 2002, the defendants have called consumers across the United States and falsely claimed they would provide them with credit cards in exchange for an advance fee, typically at least $149. The defendants allegedly claim that consumers are pre-approved for an unsecured Visa or MasterCard with a low interest rate and a high credit limit, with no security deposit required regardless of the consumer’s credit history. The FTC alleges that the defendants use high-pressure sales tactics to coerce consumers into providing their checking account information. The defendants then allegedly debit consumers’ accounts and fail to provide the promised credit card. In papers filed with the court, the FTC alleges that the defendants are unresponsive to consumers’ refund requests and that consumers seeking refunds rarely receive them.

The FTC’s complaint also alleges that the defendants have called consumers whose telephone numbers are registered on the National Do Not Call Registry and failed to pay the required annual fee to access the registered telephone numbers.

The FTC charges that the defendants have violated the FTC Act by falsely claiming that consumers would receive an unsecured credit card, then collecting money from consumers without providing the promised card. The FTC’s complaint also alleges that the defendants violated the Telemarketing Sales Rule by making false claims via telemarketing and by calling consumers whose numbers are registered on the National Do Not Call Registry. The FTC has asked the court to bar permanently the defendants’ illegal business practices and award consumer redress.

The FTC’s complaint names: 3R Bancorp; 3R E-Solutions, Inc., d/b/a CR Bancorp, Euro Banca, 3R Companies, 3R Ventures, 3R Contact Centers, 3R Solutions, 3RE E-Solutions, R 3R E-Solutions, E3R E-Solutions, and E 3R Capital Solutions; 3R E-Solutions Corporation; National United Properties, LLC, d/b/a Awfmex Management Company; 3R Real Estate Corporation, d/b/a Fairview, Inc.; E Three R Info Systems Pvt. Ltd; Ranbir Sahni; John Perton; Oliver McKinney; Brian Murphy; and Kirt Charter as defendants.

The FTC brought this matter with assistance from the members of the Toronto Strategic Partnership, a cross-border fraud law enforcement effort that includes, in addition to the FTC, Competition Bureau Canada, the Ontario Provincial Police Anti-Rackets, the Toronto Police Service Fraud Squad, the Ontario Ministry of Consumer and Business Services, and the United States Postal Inspection Service.

The FTC also received valuable assistance in this matter from the U.S. Attorney’s Office in the Central District of California, and Federal Bureau of Investigation, the U.S. Marshals Service, and the Long Beach, California Police Department.

The Commission vote authorizing staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division on November 5, 2004.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the Commission’s complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 042-3030)
(Civ. No. Civ. No. 04 C 7177 (N.D. of IL))