Consumers are sounding off to Better Business Bureaus across the U.S. and Canada about incessant automated telemarketing calls promising to lower interest rates on their credit cards. Not only are the calls a nuisance and violate U.S. and Canadian Do-Not-Call laws, but some companies behind the calls are ripping off consumers by charging large up-front fees to negotiate lower interest rates with credit card companies – something consumers can do on their own for free.
According to figures cited by the White House in January, credit card debt increased 25 percent in the past 10 years, totaling $963 billion – with per household credit card debt now at nearly $9,000. Knowing that so many families are in debt, telemarketers offering suspect financial assistance are taking advantage of the situation. Consumers have reported receiving calls at all hours of the day and night, and on both their cell and home phones despite being registered on federal Do-Not-Call lists. Consumers also tell BBB that, telemarketers have ignored their requests to stop calling.
“Similar to telemarketing calls claiming your auto warranty is expiring, calls offering to lower credit card interest rates are being made with complete disregard for federal laws,” said Dwight Kealoha, chief executive officer of Hawaii’s BBB. “These telemarketers are not forthcoming about the company they work for, but BBB has identified some offenders by working with people across the U.S. and Canada who, unfortunately, paid for assistance to reduce their interest rate.”
BBB has received numerous complaints about two Orlando-based companies, (
CSTR Solutions, Inc. and
Genesis Capital Management), and one Tacoma-based company (
Mutual Consolidated Savings). All are behind at least some of the robocalls and are promising to save people anywhere from $2,000 to $25,000 by negotiating lower interest rates with credit card companies.
Robocalls generally begin with recorded messages that include statements like: “There are no problems currently with your account, however it is urgent that you contact us concerning your eligibility for lowering your interest rates to as little as 6 point 9 percent.” or, “This is our final attempt to reach you since you've not responded to our other calls to discuss your credit card debt.” The automated message invariably does not include the name of the company, but may claim to be with “card services” or “card holder services.” Complainants tell BBB that they believe the calls were designed to deceive them into thinking their credit card company was contacting them.
After the initial recorded message, consumers must dial another number to speak to a live person. Once connected, the live “operator” usually starts a sales pitch by asking the consumer for their credit card number and if they are interested in lowering the interest rates. Then, the telemarketer asks if the consumer is willing to pay $700 to $1,000 to have the service contact the credit card company and negotiate lower rates.
“The ‘negotiation’ undertaken by these companies can be as simple as calling the customer service number listed on the back of the consumer’s credit card and asking a customer service representative to lower the interest rate,” added Kealoha. “Consumers can call to discuss their account with their credit card company on their own, for free, and get similar results. People simply don’t need to pay anyone a thousand dollars to negotiate lower rates on their behalf.”
According to BBB complaints, companies are failing to uphold money-back guarantees and not refunding money in cases where they are unsuccessful in lowering rates.
BBB offers the following advice for consumers who receive telemarketing and robocalls from companies offering to lower their interest rate:
- Put your home and cell phone numbers on the federal Do Not Call list. If your number is already on the list but continues to get telemarketing calls or your cell phone is receiving robocalls, use the same Web site to report the calls to the FTC.
- Never give personal information – including Social Security, bank or credit card numbers – over the phone to an unknown caller.
- When considering any type of financial assistance, insist on getting a contract in which all terms and conditions are clearly explained before signing up or providing credit card or other payment information. Always research the company first by reviewing its BBB Reliability Report at bbb.org.
Established in 1945, the Better Business Bureau® of Hawaii (BBB) is a nonprofit organization that sets and upholds high standards for fair and honest marketplace behavior. BBB provides objective advice, free business and charity reports, and educational information on topics affecting marketplace trust. BBB also offers complaint and dispute resolution support for consumers and businesses.