A marketer of credit card protection programs has agreed to settle charges filed jointly by the Federal Trade Commission and the State of Illinois.
Membership Services Inc. (MSI), of San Diego, CA, will pay $50,000 in restitution and refrain from marketing protection programs or any credit-related services, the FTC reported. James M. Schwindt, an officer in the firm, will pay restitution of $30,000 to settle a separate but identical case.
According to the FTC, MSI made numerous misrepresentations when telemarketing the program. For example, it told consumers that they would be held fully liable for all unauthorized charges made to their credit card accounts if they failed to buy the protection program, the FTC alleged.
In reality, consumers are liability for only up to $50, the FTC said.
The firm also falsely stated that it was affiliated with consumers’ credit card issuers, the FTC continued.
Consumers were also told that by purchasing the service, they would be eligible for low-interest credit cards.
MSI and Schwindt were sued as part of the FTC’s Operation Ditch the Pitch in 2001.
In a separate case, the FTC said that a federal court had shut down a cross-border scam.
A default judgment was entered against DPS Activity Publishing Ltd., which did business as Healing Hands Busy Book, and principals David Suggitt and Tabea Suggit.
They are to pay $500,000 in consumer redress. In addition, the FTC will distribute roughly $80,000 from returned donation checks.
The Canada-based defendants phoned businesses, asking them to purchase children’s books for donation to local hospitals, according to an FTC complaint filed in May. However, the hospitals never received any books, the FTC continued.
As part of the judgment, the defendants are barred from claiming they are affiliated with hospitals, and claiming that the children at those institutions will receive the purchased books.
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