FTC: Credit Card Scam Cost Millions

Share this article:
A credit card scam operated out of a Chicago suburb used telemarketing to dupe consumers and likely cost consumers millions of dollars, the Federal Trade Commission said yesterday.


The FTC and the state of Illinois yesterday charged Rockwell Holdings, Schaumburg, IL, along with two related companies and one individual in the scam.


In addition to Rockwell Holdings, the FTC named First Financial Solutions Inc. and American Benefits Club, both of Park Ridge, IL, and John F. Boone in its complaint. The FTC charged the companies with violating the Telephone Sales Rule and said that more than 1,000 consumers had called the agency to complain about the companies' marketing practices.


A federal judge has ordered a temporary halt to the operations, frozen the suspects' assets and appointed a receiver to take control of the companies involved.


According to the FTC, telemarketers working for the companies offered credit cards to consumers for advance fees of $99.95 to $219.95. However, credit cards were never delivered to consumers, the FTC said.


Most consumers who accepted the offer received nothing, the FTC said. In some cases, consumers received promotional literature for a membership benefits program, and in others they got a debit card, which can be used only if the consumer deposits money on the card.


The companies are accused of calling several consumers back repeatedly despite requests that calls be stopped, a violation of the TSR, the FTC said. The FTC alleged that the companies continued fraudulent operations even after the FBI raided the office of Rockwell Holdings in September.


In addition to the federal charges, Illinois charged the companies with violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and Credit Services Organizations Act. Both the FTC and the state seek a court order to permanently halt the companies' business practices, in addition to consumer restitution.


A call to Rockwell Holdings was not returned yesterday. Further information on Boone was unavailable.


Share this article:
close

Next Article in News

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

News Byte: Comcast Expanding Global Ad Delivery Through Partnership

News Byte: Comcast Expanding Global Ad Delivery Through ...

Through a partnership with Adstream , Comcast's AdDelivery Service expands its footprint across the globe.

40 Under 40 2014: Nominations Are Now Open!

40 Under 40 2014: Nominations Are Now Open!

It's time to nominate the 2014 crop of young marketing luminaries for Direct Marketing News's 40 Under 40 Awards. The deadline is Friday, June 6, 2014.

News Byte: MediaCrossing Partners with ASL Marketing on Youth Marketing Tool

News Byte: MediaCrossing Partners with ASL Marketing on ...

The digital media trading firm and marketing database company aim to help marketers target 13 to 34 year olds.