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FTC warns about interest rate reduction scams

People are being inundated with robocalls from scammers who claim they can get you a lower interest rate.

By Karen Datko Apr 27, 2010 12:03PM

This post comes from partner site ConsumerAffairs.com.

 

You pick up the phone on the second ring and wait for what seems like several seconds before someone responds to your greeting. But you find you aren't talking to a human, but a recorded sales pitch promising to lower your credit card interest rate.

 

The best advice, says the Federal Trade Commission, is to just hang up because most of these offers are scams. And consumers are being inundated with them. 

 

In a new consumer alert, "Credit card interest rate reduction scams," the FTC says consumers have just as much clout with their credit card issuers as these companies do. It urges consumers to avoid paying middlemen, and negotiate directly with the credit card companies.

The companies behind the sales pitches claim to have special relationships with credit card issuers. They guarantee that the reduced rates they offer will save you thousands of dollars in interest and finance charges, and will allow you to pay off your credit card debt three to five times faster. They claim that the lower interest rates are available for a limited time and that you need to act now. Some even use money-back guarantees as further enticement.

In fact, FTC investigators found that people who pay for these services don't get the touted interest rate reductions, don't save the promised amounts, don't pay off their credit card debt three to five times faster, and struggle to get refunds.

 

Protect yourself

If you're looking to reduce the interest rate you're paying on your credit card purchases, your best bet is to handle it yourself for free: Call the customer service phone number on the back of your credit card and ask for a reduced rate. Be calm, patient and persistent.

And if you get a rate reduction robocall, the FTC says:

  • Don't give out your credit card information. Once scammers have your data, they can charge your credit card for their own purchases or sell the information to other scammers.
  • Don't share other personal financial or sensitive information like your bank account or Social Security numbers. Scam artists often ask for this information during an unsolicited sales pitch, and then use it to commit other frauds against you.
  • Be skeptical of any unsolicited sales calls that are recorded, especially if your phone number is on the National Do Not Call Registry. You shouldn't get recorded sales pitches unless you have specifically agreed to accept such calls, with a few exceptions. See “New rules for robocalls.”
  • If your number is on the National Do Not Call Registry, a telemarketer may call you only if you have agreed to accept calls from the company the salesperson works for, if you have bought something from the company within the last 18 months, or if you have asked the company for information within the last three months.
  • To report violations of the National Do Not Call Registry or to register your phone number, visit DoNotCall.gov or call (888) 382-1222.

Related reading at ConsumerAffairs.com:

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