FTC Leads Joint Law Enforcement Effort Against Companies That Allegedly Made Deceptive Cardholder Services Robocalls

The Federal Trade Commission escalated its campaign against illegal, unwanted robocalls announcing that it pulled the plug on five companies based in Arizona and Florida allegedly responsible for millions of illegal pre-recorded calls from “Rachel” and others from “Cardholder Services.”  State partners in Arizona, Arkansas, and Florida also took legal action against similar companies.

Just two weeks after the FTC held a summit in Washington, DC, to examine the robocall problem, federal courts granted the agency’s request to temporarily halt five robocall operations that allegedly deceived consumers into paying hundreds or thousands of dollars by making phony claims that they could reduce credit card interest rates in return for an upfront fee.

“At the FTC, Rachel from Cardholder Services is public enemy number one,” said FTC Chairman Jon Leibowitz.  “We’re cracking down on illegal robocalls by bringing law enforcement actions and pursuing technical solutions to the problem.”

The FTC gets more than 200,000 complaints each month about telemarketing robocalls, including calls from “Rachel” that pitch consumers with a supposedly easy way to save money by reducing their credit card interest rates.  After collecting an up-front fee, however, the FTC believes that the companies do little if anything to fulfill their promises.

At the recent Robocall Summit, the FTC issued a challenge to the public offering a $50,000 cash prize for the best technical solution to block illegal robocalls on landlines and mobile phones.

Rachel from Cardholder Services

In the robocall cases announced today, the FTC alleges that the defendants place automated calls to consumers, typically with a prerecorded message from “Rachel” or someone else from “Cardholder Services.”  The calls purport to have an “important message” regarding an opportunity to reduce high credit card interest rates.  Consumers are urged to “press 1” to connect with a live representative, or “press 2” to discontinue getting such calls.  Consumers who press 1 are connected to live telemarketers.  Most consumers have no way to screen the calls using Caller ID, as the incoming number allegedly is often “spoofed,” or displayed as a false number.  In many cases, the name displayed on the Caller ID is so generic, such as “Card Services,” that it provides little information about who is calling.

According to the FTC, consumers who reach a live telemarketer are then pitched allegedly deceptive offers to have their credit card interest rates substantially reduced, sometimes to as low as 6.9 or even zero percent.  The telemarketers allegedly guarantee that lowering card interest rates will save the consumers thousands of dollars in finance charges in a short period of time and will allow them to pay off the balances more quickly.  Some telemarketers allegedly claim that consumers will save at least $2,500 in finance charges and will be able to pay off their balances two to three times faster, without increasing their monthly payments.

In some cases, according to the FTC, the telemarketers claim to be calling from the consumer’s credit card company.  In other cases, they use “Cardholder Services” to suggest a relationship with a bank or credit card company.  If the consumer expresses an interest in the rate reduction offer, the telemarketer sometimes conducts a purported “audit” to determine whether the consumer qualifies.  Consumers provide their financial and personal information, and are then put on hold while the “audit” is completed.  According to the FTC, the “audit” typically is used only to determine whether consumers have enough credit available on their credit cards to pay the company’s fee.

After consumers have been “approved” for the program, according to the FTC, the telemarketer informs them that there is an up-front fee, typically ranging from several hundred dollars to nearly $3,000.  To convince them to pay the fee, telemarketers often say that it will be more than offset by the money the consumer will save through the program.  In some cases, the FTC alleges that consumers’ credit cards were charged even if they did not agree to pay for the service.  In other cases, the defendants allegedly do not disclose a fee at all, or claim there will be no fee.

The companies allegedly often claim to have a no-risk guarantee, saying that if they don’t provide consumers with the promised rate reductions and finance charge savings, they will refund the fee.  However, consumers who later complain to the companies find it difficult, if not impossible, to get their money back.

After consumers pay the up-front fee, the FTC alleges, they typically find that the companies do little or nothing to lower their credit card interest rates.  The only thing that some companies do, according to the FTC, is to initiate three-way calls with consumers’ credit card issuers and orally request a rate reduction, a request that consumers could make on their own and that invariably is denied.  In some cases, the companies may also apply in the consumer’s name for a new credit card with a low- or zero percent introductory interest rate.  But according to the FTC, even if a new card is issued, the consumer is unlikely to see the promised savings, as the credit limits likely are low and the introductory rate often goes up after six or 12 months.  Consumers often find that they cannot transfer their balances to these new cards.

The FTC’s Law Enforcement Cases

The five complaints announced today were filed against the following companies and their principals: 1) Treasure Your Success, 2) Ambrosia Web Design, 3) A+ Financial Center, LLC, 4) The Green Savers, and 5) Key One Solutions, LLC.  Each complaint alleges, among other things, that the defendants violated the FTC Act by misrepresenting that consumers who buy their services:

• will have their credit card interest rates reduced substantially; and

• will save thousands of dollars as a result of lowered credit card interest rates.

Four of the five complaints announced today also charge that the defendants violated the FTC Act by making other misrepresentations, such as claiming that consumers who buy their services will be able to pay off their debts much faster as a result of lowered credit card interest rates and making false claims about their refund policies.

The complaints also charge the defendants with multiple violations of the Telemarketing Sales Rule (TSR), for misrepresenting their services, calling numbers on the Do Not Call Registry, and collecting up-front fees.  The TSR also specifically prohibits charging or receiving a fee in advance of providing debt relief services and misrepresenting the terms and conditions of debt relief services.

Finally, the complaints charge that the defendants are responsible for making illegal robocalls, in violation of the TSR.  Nearly all pre-recorded telemarketing calls have been prohibited since September 1, 2009.   In the FTC’s experience, companies such as these often hire others to make calls on their behalf.  The FTC alleges in each case that the defendants themselves are legally responsible for making the robocalls.

The Commission votes authorizing the staff to file each complaint were 5-0.  The complaints were filed in the U.S. district courts listed below.  In filing the complaints, the FTC seeks to permanently stop the defendants’ allegedly illegal conduct.  In each case, the court granted the FTC’s request for a temporary restraining order, which halts the operations pending further court proceedings.

The case against Treasure Your Success was filed in the U.S. District Court for the Middle District of Florida against the following defendants:  WV Universal Management, LLC, also doing business as Treasure Your Success; Global Financial Assist, LLC; Leading Production, LLC; Willy Plancher, individually and as a member of WV Universal Management, LLC; and Valbona Toska, individually and as a member of WV Universal Management, LLC.

The case against Ambrosia Web Design was filed in the U.S. District Court for the District of Arizona against the following defendants:  Ambrosia Web Design LLC, also doing business as AWD; Concord Financial Advisors LLC; CAM Services Direct LLC; AFB LLC; Western GPS LLC; Chris Ambrosia, individually and as a manager of Ambrosia Web Design LLC, AFB LLC, and CAM Services Direct LLC; and LeRoy Castine, a/k/a Lee Castine, individually and as a manager of Ambrosia Web Design LLC, Concord Financial Advisors LLC, AFB LLC, and Western GPS LLC.

The case against A+ Financial Center, LLC was filed in the U.S. District Court for the Southern District of Florida against the following defendants:  A+ Financial Center, LLC, also doing business as Accelerated Financial Centers, LLC; Accelerated Accounting Services LLC; Christopher L. Miano, individually and as the managing member of Accelerated Accounting Services LLC; and Dana M. Miano, individually and as the managing member of A+ Financial Center, LLC.

The case against The Green Savers, LLC was filed in the U.S. District Court for the Middle District of Florida against the following defendants:  The Greens Savers, LLC, also doing business as Elite Services and Advanced Data Solutions; Christopher Adams, individually and as a member of The Green Savers, LLC; and Vikash Jawalapersad, also d/b/a Pavac, Inc., individually and as a member of The Green Savers, LLC.

The case against Key One Solutions, LLC was filed in the U.S. District Court for the District of Arizona against the following defendants: ELH Consulting, LLC, also doing business as Proactive Planning Solutions; Purchase Power Solutions, LLC; Allied Corporate Connection, LLC; Complete Financial Strategies, LLC; 3Point14 Consulting, LLC, also d/b/a Elite Planning Group; Key Tech Software Solutions, LLC, also d/b/a Key One Solutions; Emory L. Holley IV, a/k/a Jack Holley, individually and as the sole member of ELH Consulting, LLC; Lisa Miller, individually and as the sole member of Allied Corporate Connection, LLC, Complete Financial Strategies, LLC, and Purchase Power Solutions, LLC; Rares Stelea, individually and as the sole member of 3Point14 Consulting, LLC; and Justin Journay, individually and as the sole member of Key Tech Software Solutions, LLC.

Law Enforcement Coordination

These five cases are part of a federal-state interagency effort to crackdown on illegal robocalls pitching deceptive credit card interest rate reduction schemes.  The Offices of the Attorneys General of Arizona and Arkansas filed separate law enforcement actions against other companies allegedly deceptively pitching credit card interest rate reduction schemes through the use of robocalls, and they provided substantial assistance to the FTC in this effort.  In addition to providing substantial assistance to the FTC, the Florida Department of Agriculture and Consumer Services also initiated separate enforcement actions against four Florida-based operations pitching the same schemes through the use of robocalls.  The FTC appreciates these partners’ efforts.

The FTC also appreciates the assistance of the following partners:  the Offices of the Attorneys General of Florida, Missouri, and West Virginia; the U.S. Postal Inspection Service, Phoenix and Miami Divisions; the Better Business Bureaus of Central, Northern, and Western Arizona, Southeast Florida and of the Caribbean, Central Florida, and West Florida; the police departments of the cities of Mesa and Tempe, Arizona, and Port Saint Lucie, Florida; the Florida Department of Financial Services; and the Pinellas County (Florida) Office of Consumer Protection.

Information for Consumers

The FTC recently issued tips for consumers, as well as two new consumer education videos explaining robocalls and describing what consumers should do when they receive one.  See ftc.gov/robocalls for more information.

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 complaints are not a finding or ruling that the defendants have actually violated the law.  The cases will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

(FTC File Nos.: Treasure Your Success, 122-3190, Case No. 6:12-cv-1618-orl-22krs; Ambrosia Web Design, 122-3174, Case No. CV-12-2248-PHX-FJM (D. Ariz.); A+ Financial Center, LLC, 122-3197, Case No. 2:12-CV-14373-DLG (S.D. Fla.); The Green Savers, 122-3199; Case No. 6:12-CV-1588-ORL-28-DAB (M.D. Fla.); and Key One Solutions, LLC, 122-3195, Case No. CV-12-2246-PHX-FJM (D. Ariz.))