FTC: Credit Card Scam Cost Millions
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.