BBB Warns of Robocalls Claim to Lower Credit Card Interest Rate
RALEIGH, N.C. (June 11, 2009)—In January 2009, the White House reported a 25 percent increase in credit-card debt over the past 10 years, totaling $963 billion. Credit card debt per household now averages nearly $9,000. Better Business Bureau of Eastern North Carolina (www.bbb.org) warns consumers across the state of incessant automated telemarketing calls promising to lower interest rates on their credit cards. Several companies are ripping off consumers by charging large up-front fees to negotiate lower interest rates, which is something consumers can do on their own for free.
"Telemarketers are taking advantage of consumers' financial situations and are not forthcoming about the companies they are calling on behalf of," says Beverly Baskin, president and CEO of the Better Business Bureau of Eastern North Carolina. "These telemarketers have a complete disregard for federal laws; unfortunately, several consumers have fallen victim to their deceitful practices."
BBB has received numerous complaints about two Orlando-based companies, CSTR Solutions Inc. and Genesis Capital Management, as well as one Tacoma-based company, Mutual Consolidated Savings. Each of the companies have conducted robocalls and claim to save consumers $2,000 to $25,000 by negotiating lower interest rates with credit card companies. These calls are reported as a nuisance and violate U.S. and Canadian Do-Not-Call laws.
Consumers have reported receiving calls as early as three in the morning on both their cell and home phones despite having registered the numbers with federal Do-Not-Call lists. Consumers also tell BBB that, despite requests to telemarketers to stop calling, the calls continue to come.
Robocalls generally begin with recorded messages that include statements, such as: "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 6.9 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 as a means to lure consumers into believing their credit card company is contacting them.
The automated message then urges consumers to dial another phone number to connect to a live person to resolve the matter. 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. Operators then ask if the consumer is willing to pay to have their firm contact the credit card company and negotiate lower rates, which may range from $700 to $1,000. According to BBB complaints by consumers that have engaged these services, companies are failing to uphold money-back guarantees and are not refunding money in cases where they are unsuccessful in lowering rates.
"Consumers are fully capable of talking to credit card companies on their own to negotiate lower rates and get similar results without having to pay a fee to any company," adds Baskin. "Consumers can simply call the customer service number listed on the back of their credit card and ask a customer service representative to lower the interest rate."
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 financial assistance, insist on getting a contract in which all terms and conditions are clearly explained before signing up, 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, the same Web site can be used to report the incident to the FTC.
Consumers are encouraged to contact the BBB if they have similar experiences with any of these companies or others. Any uncertainties should be brought forth to ensure that the company is reliable and the information provided is valid.
# # #
About BBB of Eastern North Carolina:
The Better Business Bureau of Eastern North Carolina is a 501 (c)(6) not-for-profit corporation serving 33 counties in eastern North Carolina. The organization is funded primarily by BBB Accredited Business fees from more than 3,200 local business and professional firms. The BBB promotes integrity, consumer confidence and business ethics through business self-regulation in the local marketplace. Services provided by the BBB include, reports on companies and charitable organizations, general monitoring of advertising in the marketplace, dispute resolution services, and consumer/business education programs. All services are provided at no cost to the public, with the occasional exception of mediation and arbitration. Visit www.bbb.org.
BBB of Eastern North Carolina
5540 Munford Rd., Ste. 130
Raleigh, NC 27612-2655
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