The Illinois Attorney General has filed a lawsuit against a telemarketing company that allegedly promised to immediately reduce consumers’ credit card interest rates but ultimately failed to do so.
Named as defendants were Priority Direct Marketing International, Inc. (PDMI), a Bedford, TX-based telemarketing firm run by its president, William Fithian, and Advanced Management Services NW, LLC (AMS), a Spokane, WA-based firm owned by Ryan Bishop, according to AG Lisa Madigan.
Direct Newline was unable to reach either PDMI or AMS at deadline.
The suit, which was filed in Sangamon County, IL, asks the court to enter a permanent injunction barring the defendants from engaging in debt settlement in Illinois and to order the defendants to pay restitution for complainants, civil penalties of $50,000 for violating the Consumer Fraud Act, and an additional $50,000 for each violation committed with the intent to defraud, according to the AG.
The suit alleged that the two companies worked in a concerted telemarketing scheme to solicit and enroll consumers in deceptive debt negotiation service agreements that promise to immediately reduce consumers’ credit card interest rates, with a guaranteed savings of $2,500, according to the AG.
PDMI and AMS telemarketing representatives allegedly promise consumers that the companies will negotiate with consumers’ credit card companies to lower interest rates, and will provide full refunds if they are unsuccessful, the AG continued
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After consumers agree to enroll in the program, the telemarketers allegedly charge consumers’ credit cards for set up fees ranging from $391 up to $1,590. The defendants allegedly tell consumers that these fees will be reimbursed at a later date by the consumers’ banks, according to the AG.
Only after consumers’ credit cards are charged for the setup fees do they receive any documentation on the program’s terms and conditions, which on several points, contradict the telemarketers claims in their sales solicitations. Specifically, the defendants misleadingly claim that they can guarantee an interest rate reduction for all customers or provide full refunds in instances where rate reductions are not secured, according to the AG.
When customers have requested refunds, after the defendants have failed to negotiate any interest rate reductions, the defendants allegedly refuse altogether or give refunds minus a non-refundable $199 fee that was not disclosed during the sales pitch, according to the AG.
