WASHINGTON–More than $11 million in refunds is being sent to consumers who lost money to a bogus credit card interest rate reduction scheme operated by E.M. Systems & Services, according to the FTC.
The FTC and the State of Florida alleged that the company’s owners, Steven D. Short and Karissa L. Dyar, used a “variety of phony business names with associated websites, cold-called consumers with credit card debt and falsely promised to save them thousands of dollars by reducing their credit card interest rates.”
The FTC said the defendants charged an up-front fee between $695 and $1,495, and falsely promised to provide refunds to consumers if they failed to reduce the interest rates.
According to the complaint, the telemarketers identified themselves as “card services,” “credit services,” and “card member services,” or used one of the defendants’ phony business names.
“To win consumers’ trust, they said they knew the amount of consumers’ credit card debt, provided the caller’s license or badge number, mentioned the Internet domain name of the phony business, and falsely claimed they had a business relationship with consumers’ lenders,” the FTC said.
Nearly $1,000 in Refunds
More than 11,000 consumers are receiving full refunds, averaging $995 each. Consumers who receive checks should deposit or cash their checks within 90 days, as indicated on the check, the FTC advised, noting it never requires people to pay money or provide account information to cash a refund check.
The FTC said the funds for the refund program come from its case against First Data Merchant Services, the company that processed credit card payments for the defendants in this case. According to the FTC, First Data allegedly ignored repeated warnings from employees, banks, and others that they were processing payments for companies that were breaking the law. First Data agreed to pay $40 million to settle the FTC’s charges.