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Archive for the ‘credit cards’ Category

Following a request by the Federal Trade Commission, a U.S. district court judge imposed a telemarketing ban on a Canadian operation that targeted U.S. consumers with false claims that it could reduce their credit card interest rates.

The court entered a permanent injunction that;

1) Effectively puts the defendants out of the telemarketing business.

2) Bars them from misrepresenting that they are affiliated with consumers’ credit card companies.

3) Bars them from claiming that they can get consumers’ credit card interest rates reduced.

4) Ordered the defendants to pay more than $7.8 million.

According to the FTC’s complaint, the telemarketing operation defrauded approximately 12,000 consumers out of more than $7.8 million between 2005 and 2007 by falsely claiming that it could significantly reduce consumers’ existing credit card interest rates, thereby saving them thousands of dollars in both interest and finance charges.

The defendants falsely stated, or implied that they were affiliated with consumers’ credit card companies and for $675 plus $20 shipping and handling, the defendants sent consumers promotional materials that included promises to significantly reduce their interest rates.

The complaint alleged that the defendants promised to reduce the interest charged on their credit cards to between 4.75% and 9%, and save consumers at least $2,500.

The company operating the scam simply set up three-way telephone calls with consumers and their credit card companies, and then requested reductions in interest rates.

The FTC charged that the defendants’ misrepresentations;

1) Violated the FTC Act and the Telemarketing Sales Rule (TSR).

2) Violated the TSR by “spoofing” telephone numbers so that their calls appeared on consumers’ caller identification services as coming from another number.

3) Failed to provide the names of the defendants or their telemarketer on caller identification services.

To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357) or visit their website.

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The Federal Reserve noted in a survey of loan officers that was released on Monday, May 6, that demand for prime mortgages rose in the first quarter for the first time since early 2007, and this was in spite of the fact that many banks tightened their requirements for home loans.

The increase in demand comes as 30-year mortgage rates fell to an average 4.78% last week.

Other details of the survey state that, about one half of U.S. banks tightened their lending standards on prime mortgages, which is up from about 45% from that given in a survey that was released in early February.

65% of banks reported having tightened their standards on non-traditional mortgages, such as adjustable-rate loans with multiple payment options, up from 50% in the last survey, and nearly 60% of banks said they tightened their requirement on credit card loans in the past three months.

The Fed’s survey was based on responses from fifty three domestic banks and twenty three foreign banks.

Additional good news was also reported by the National Association of Realtors which announced that its Pending Home Sales Index showed that pending sales of existing homes climbed upward in March, making two consecutive months of increases.

The NAR attributed a rise of 3.2% in signed contracts to “a flood of first-time home-buyers taking advantage of excellent mortgage interest rates”.