Credit Card Marketers Will Repay Consumers $1.4M
According to the FTC, First Freedom Financial Corp. and Southern Telmark Corp. since at least 1996 charged consumers $79 to $229 for credit cards regardless of their credit history. The companies marketed the offers through magazine ads and postcards, the FTC said.
Telephone agents told consumers who responded to the ads by calling a toll-free number that the fees were needed for application processing, according to the FTC. No consumers who paid the fees received the promised cards, the FTC said.
In addition to reimbursing consumers, the companies agreed to a ban on marketing credit cards and related products and services via the Internet, mail or telemarketing. Though the money reimbursed to consumers apparently represents all of the assets of the two companies, they must pay another $30 million if they are proven to have misrepresented their financial status, the FTC said.