Robocalls Striking Again
Telemarketers Selling Debt Assistance Plague Consumers across the Nation
Austin, TX – June 16, 2009 - Consumers across the U.S. and Canada are sounding off to Better Business Bureau about incessant automated telemarketing calls promising to lower interest rates on their credit cards. Not only are the calls a nuisance and violate U.S. and Canadian Do-Not-Call laws, but some companies behind the calls are ripping off consumers by charging large up-front fees to negotiate lower interest rates with credit card companies, something consumers can do on their own for free.
According to the April 2009 Nilson Report, the average credit card debt last year for households that have a credit card is $10,679. Knowing that so many families are struggling with debt, telemarketers offering suspect financial assistance are taking full advantage of the situation. Consumers have reported receiving calls as early as three in the morning and on both their cell and home phones even when they have registered the numbers with federal Do-Not-Call lists. Consumers also tell BBB that, despite their requests to the telemarketers to stop calling, the calls continue to come.
“Just like the auto warranty calls we have warned consumers about, these automated offers to lower credit card interest rates also seem to have complete disregard for federal laws,” said Carrie A. Hurt, President and CEO of BBB serving Central, Coastal and Southwest Texas. “These telemarketers are not telling consumers who they work for, but BBB has identified some offenders by working with consumers who unfortunately paid for assistance to try reducing their interest rate.”
BBB has received numerous complaints about two Orlando-based companies, CSTR Solutions, Inc. and Genesis Capital Management, and one Tacoma-based company, Mutual Consolidated Savings. All are behind at least some of the robocalls and are promising to save consumers anywhere from $2,000 to $25,000 by negotiating lower interest rates with credit card companies.
Robocalls generally begin with recorded messages that include statements like: “There are no problems currently with your account, however it is urgent that you contact us concerning your eligibility for lowering your interest rates to as little as 6 point 9 percent.” or, “This is our final attempt to reach you since you've not responded to our other calls to discuss your credit card debt.” The automated message invariably does not include the name of the company, but may claim to be with Card Services or Card Holder Services. Consumers allege to BBB that they now believe the calls were designed to deceive them into thinking their credit card company was contacting them.
After the initial recorded message, consumers must dial another number to be connected to a live person. The live “operator” usually starts the sales pitch by asking for the consumer’s credit card number and whether the consumer is interested in lowering their interest rates. From there, callers begin closing the sale, asking if the consumer is willing to pay – usually from $700 to $1,000 - to have their firm contact the credit card company and negotiate lower rates.
“Many of these companies simply call the customer service number listed on the back of the consumer’s credit card and ask a representative to lower the consumer’s interest rate,” added Hurt. “Consumers can do that on their own, for free, and getting similar results without having to pay a company a large fee to negotiate a lower rate on their behalf.”
BBB offers the following advice for consumers who receive “robocalls” from companies offering to lower their interest rate:
- Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer. Always research the company first by reviewing its Reliability Report at www.bbb.org.
- When considering any company offering any type of financial assistance, insist on getting a contract in which all terms and conditions are clearly explained before signing up or providing credit card or other payment information.
- U.S. consumers can place their home phone number on the federal Do Not Call list by visiting www.donotcall.gov. If the consumer’s number is already on the list but continues to receive telemarketing calls—or is receiving robocalls on a cell phone—he or she can use the same Web site to report the incident to the FTC.
For more tips on keeping your credit card rate low and researching debt negotiation companies, visit www.bbb.org.