Fla. Co. Settles Over Credit Cards
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WASHINGTON (AP) _ A company that sold credit-card protection over the phone has settled federal allegations it lied to and bullied consumers to persuade them to buy worthless services.
Under the settlement, Orlando, Fla.-based Advanced Consumer Services and two of its principal officers, Anthony and Tracy Andrews, agreed to pay about $700,000 to consumers, the Federal Trade Commission said Wednesday.
The FTC had alleged that telemarketers working for ACS scared consumers into spending hundreds of dollars each for protection they didn’t need against unauthorized credit card charges. Under federal law, cardholders hit with unauthorized charges are liable for only $50 worth of charges to a credit card account and $500 to a debit account.
The telemarketers told consumers they were calling on behalf of their credit card issuers or a government agency and claimed criminals were stealing their credit card numbers, the FTC said in a complaint filed in October 2000 in U.S. District Court in Orlando. Consumers were told they could be held responsible for hundreds or thousands of dollars unless they bought extra protection, the FTC alleged.
In some cases, consumers were charged for protection packages whether they wanted them or not, the FTC said.
The companies TNT Talks Inc. and Least Cost Utilities Inc., which did business as Advanced Consumer Services, were also defendants in the FTC suit. Under the settlement, which must still be approved by the court, none of the defendants admitted any wrongdoing or liability.
The agreement also permanently bans the defendants from selling any credit-related goods or services. To conduct future telemarketing activities, the defendants must first post a $300,000 bond.
Andrew Cove, an attorney for the defendants, said they had no comment on the settlement.
On the Net:
Federal Trade Commission: http://www.ftc.gov