Wednesday, June 3, 1998

PRE-APPROVED PROBLEMS

Recently, the Federal Trade Commission announced that SureChek and its telemarketing agents had agreed to settle charges that they operated a bogus credit card business. According to the FTC, SureChek, doing business as Consumer Credit Corporation, claimed it could obtain unsecured credit cards for consumers, regardless of their credit worthiness, if consumers paid up-front "processing fees" of up to $129. However, few of those consumers ever received credit cards, and those that did were not told in advance of additional processing and annual fees. In some cases, consumers who gave out their checking account numbers found that SureChek had debited money without permission. SureChek allegedly used third party telemarketers to reach consumers all across the country. SureChek and six of its telemarketers were all charged with violating federal law, including the Telemarketing Sales Rule. The defendants have agreed to settle those charges.

As a part of the settlement SureChek is:

• barred from making false or misleading statements about providing credit cards;

• required to fully disclose all additional fees;

• barred from selling or transferring their customer lists to anyone else;

If someone calls you offering an unsecured credit card regardless of your credit history, be wary. Only banks can issue credit cards, and they only issue them to people they feel will pay them back. If you have bad or no credit, the bank will probably turn down your application, or require you open a savings account to "secure" the credit card - the account balance is equal to your credit line.

Don't give out your bank account number to any telemarketer unless you intend to have money withdrawn from your account. Ask for written information about a credit card or any other telemarketed offer to be mailed to you. You should have time to consider the offer and read over NFIC's telemarketing and online credit card tips. If the telemarketer insists that you have apply at that moment, turn it down. A real bank will be just as happy to accept your application today or tomorrow.

For more information on the SureCheck case, check out the FTC press release.

NOTE: Stipulated final judgments are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

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