Consumers cash in on credit card scam
By Cara Henis | Published: July 24, 2009
Defrauded consumers got some cash back from the Federal Trade Commission earlier this month.
On July 15, the FTC mailed refund checks of about $200 to customers who were allegedly promised a credit card that worked like a Visa or MasterCard. The cards were marketed at people with bad credit, who were told that the cards could be used anywhere, according to previous reports.
The Florida-based company, Integrity Financial Enterprises, charged an upfront fee of $200 to $300 for the cards, supposedly telling consumers that they'd receive a reimbursement. However, the cards were only functional if used when buying from a catalog or website owned by the company and refunds were never issued. Those who tried to cancel were charged termination fees.
The FTC sued Integrity Enterprises, its owner Robert James Fischbach, and the other companies owned and used by Fischbach to market the cards -- Infinite Financial and National Benefit Exchange -- during a telemarketing fraud sweep in 2008.
The sweep, "Operation Tele-PHONEY," uncovered 12 other cases of fraud, which affected more than 500,000 people and resulted in more than $100 million in losses, according to an FTC press release.
The FTC settled its complaint with Fischbach in December 2008. Fischbach has since been prohibited from falsely representing his cards or business in the future and was sanctioned with a monetary fine of $2.4 million. Fischbach and the companies also had to relinquish all financial assets to the FTC.
The FTC is using these assets to repay consumers who fell victim to the scam.
Only 70 customers filed for a redress to receive monetary compensation, according to an FTC spokesman.
It is unclear as to how many people were affected by Fischbach's fraudulent cards.
- Court hears arguments on CFPB constitutionality – The D.C. Circuit Court of Appeals hearing Wednesday sets the stage for a decision that could reduce the independence and power of the federal consumer watchdog agency ...
- 6 steps to take when a credit card holder dies – The task of notifying issuers, closing accounts can easily be pushed aside ...
- Suspect card fraud? How to file a claim – What to do when you spot a suspicious charge on your credit or debit card ...