Credit-Protection Firm Settles Federal ChargeA company that marketed credit-card fraud protection -- a service increasingly under scrutiny by federal authorities -- has settled charges that it violated the Telemarketing Sales Rule, the Federal Trade Commission said yesterday.
Millennium Industries Inc., Mesa, AZ, and its owner, Anthony V. Dunghills, agreed to a ban on selling credit-card protection insurance. A suspended $1 million penalty against the company will be enacted if the company has failed to properly disclose its financial status.
According to the FTC charges filed in 2001, Millennium telemarketers called consumers, claiming to be affiliated with the consumer's credit card provider. The telemarketers falsely told consumers that they would be held liable for any unauthorized charges made against their credit cards.
The FTC said the settlement was the 10th such agreement it had reached with a telemarketer of credit-card protection since 1998. The charges against Millennium were filed as part of the FTC's 2001 "Ditch the Pitch" telemarketing fraud sweep.
In April, the FTC reached a $700,000 settlement with an Orlando, FL-based credit-card protection marketer. FTC authorities have repeatedly said that such services are "worthless" because under federal law the maximum consumers can pay for unauthorized credit-card charges is $50.