Canadian Telemarketer to Pay Fine After State Investigation

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The Pennsylvania attorney general's office yesterday said a Canadian telemarketing firm has agreed to pay the state $7,500 to settle claims that it had used deceptive tactics to market a credit card protection program to consumers in the state.


American Fraud Watch Services Inc., White Rock, British Columbia, also agreed to stop telemarketing to Pennsylvania consumers and to provide refunds to consumers who request cancellation of the service.


According to investigators, American Fraud Watch conducted a telemarketing campaign in which it called consumers to offer them a credit card protection program for $299, which the company claimed would protect consumers against unauthorized charges if their credit cards were lost or stolen.


The investigators claim that the company lied to consumers by telling them that they would be held responsible for charges made to a stolen credit card if they did not report it stolen within 48 hours. Under federal law, consumers cannot be held liable for more than $50 of any unauthorized charge, according to the attorney general's office.


The company also was accused of failing to clearly identify itself when it called customers, charging customers immediately even though they agreed to a 30-day free trial, failing to tell consumers that that they had the right to cancel within three days, conducting telemarketing without registering and securing a bond, and failing to state the purpose of the call.


American Fraud Watch could not be reached for comment.


The $7,500 settlement included $5,000 in civic penalties and $2,500 for the cost of the investigation.
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