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An alluring pitch, “We can reduce your credit card interest rates!” managed to get consumers from all over the country to pony up $149—$599 for debt relief help they didn’t get, according to the Federal Trade Commission. This week, the FTC announced a court froze the assets of a telemarketing agency that the FTC believes violated federal law.

The company in question, Premier Nationwide Corporation, allegedly cold-called consumers, promising to get them lower interest rates on their credit card debts. Those who took the bait and paid the fee were then sent a list of low-interest-rate credit cards and told to apply for them on their own. Or they were told they could enroll in a Debt Management Plan, requiring them to close all their credit card accounts—and pay a monthly fee for the administration of the DMP.

I have a strong sense of deja vu while writing this. Early in my career (pre-Internet), consumers would send $4 to the non-profit organization for which I worked, and we would send them a list of low-rate credit cards. Every so often we would find out that some marketer had copied our list and was selling it for tens or hundreds of dollars. Eventually, the crooks would be shut down or disappear, and all would be quiet until another one surfaced.

The FTC listed numerous violations of the FTC Act in its complaint against the company. Most involve alleged violations of the Telemarketing Sales Rule, a federal law that prohibits marketers from charging and collecting an advance fee before renegotiating, settling, reducing or otherwise altering consumers’ debts. In fact, the firms may not charge a fee until at least one debt has been renegotiated or settled. The FTC also alleges that the company misrepresented its refund policy. Those who were told refunds were available if they weren’t satisfied (not everyone was offered the option) were unable to get their money back when they realized they weren’t going to get what they thought they were buying.

We’ll Help You For Free

Are your credit card rates too high? You don’t have to pay hundreds of dollars for help. You can:

  • Consider transferring your balance to a credit card with a zero percent APR introductory rate. (Our credit card expert Beverly Harzog recent looked at the Best Balance Transfer Cards in America.) Or look for lower interest credit cards that are specifically designed for people with your credit standing.
  • Learn how to negotiate directly with your credit card company to lower your rates. Read my article in which I interview a credit card negotiation expert here.
  • Create a plan to get out of debt using an online tool like SavvyMoney.

[Credit Cards: Research and compare low APR credit cards at Credit.com.]

Image: mollybob, via Flickr.com

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