An International Credit Card Operation Settles FTC Charges

An international telemarketing enterprise has agreed to settle Federal Trade Commission charges accusing them of violating trade acts and the Telemarketing Sales Rule.

Under the settlement, 3R Bancorp and its co-defendants will pay $1.85 million in full redress to consumers and stop its illegal practices, which included falsely promising consumers a “guaranteed” low-interest credit card for an advance fee, calling people whose telephone numbers are registered on the National Do Not Call Registry, and failing to pay the required annual fee to access DNC-listed numbers.

The settlement follows an FTC complaint filed in November 2004, when a federal court issued a temporary restraining order halting the defendants’ illegal activities, freezing their assets and appointing a receiver to take over their operation.

The order was entered by the U.S. District Court for the Northern District of Illinois, Eastern Division, on May 17, 2006.

The settlement was part of a large, far-reaching, multinational enforcement operation dubbed “Operation Global Con.” The enforcement group is directed at stopping mass-marketing fraud schemes.

More than 565 people in North America, South America and Europe have been arrested as part of this ongoing action that began March 1, 2005, and involved coordination by national and international law enforcement agencies.

“Operation Global Con” targeted mass-marketing schemes that were international in scope and impact, conducted by criminal groups and generated significant proceeds. The schemes were carried out through various methods, such as telemarketing, the Internet and mass mailings. They also included advance-fee schemes; foreign currency trading; bogus lottery, prize and sweepstakes schemes; offers of nonexistent investments; bogus offers of “pre-approved” credit cards or credit-card protection and tax fraud schemes.

Ninety-six separate U.S. investigations in this operation led to the discovery of more than 2.8 million victims, who suffered losses totaling more than $1 billion.

“Mass-marketing fraudsters think they can use modern technology to operate from anywhere in the world with impunity,” said Attorney General Alberto R. Gonzales. “The virtual task forces that we have built with Canada, Costa Rica and the Netherlands provide a new model for us to bring these international con artists to justice.”

The operation resulted in the arrest of 139 individuals in the United States, and an additional 426 arrests in Canada, Costa Rica, the Netherlands and Spain. Authorities executed 447 search warrants in the five countries as part of the operation and 61 individuals have been convicted in the United States to date.

In addition, the FTC brought 20 civil actions against 140 defendants in the illegal fraud schemes.

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