Beware robocalls selling dubious debt assistance

 Consumers across the U.S. are sounding off to Better Business Bureau 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. 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.

“Similar to telemarketing calls claiming your auto warranty is expiring, calls offering to lower credit card interest rates also seem to have complete disregard for federal laws,” said Carrie Lorimer, BBB director of operations. “These telemarketers are not forthcoming about the company they’re calling on behalf of, but BBB has identified some offenders by working with consumers who, unfortunately, paid for assistance in reducing their interest rate.”

Many families are drowning in debt and telemarketers offering financial assistance are taking full advantage of the situation. Consumers have reported receiving calls as early as 3 in the morning and on both their cell and home phones even when they have registered the numbers with federal Do Not Call lists.

Consumers also tell BBB that, despite their requests to the telemarketers to stop calling, the calls continue to come.

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 6.9 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 note to BBB that they now 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 be connected to a live person. The live “operator” usually starts the sales pitch by asking for the consumer’s credit card number and whether the consumer is interested in lowering their interest rates.

From there, callers begin closing the sale, asking if the consumer is willing to pay – usually from $700 to $1,000 - to have their firm 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,” said Lorimer.

“Consumers are fully capable of talking to credit card companies on their own, for free, and getting similar results. Consumers simply don’t need to pay any company 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 robocalls from companies offering to lower their interest rate:

• Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer. Always research the company first by reviewing its Reliability Report at www.bbb.org.

  • When considering any company offering 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.

  • U.S. consumers can place their home phone number on the federal Do Not Call list by visiting www.donotcall.gov. If the consumer’s number is already on the list but continues to receive telemarketing calls — or is receiving robocalls on a cell phone — he or she can use the same Web site to report the incident to the FTC.