Scam watch: Credit card interest, real estate, time shares
Here is a roundup of alleged cons, frauds and schemes to watch out for.
Credit card interest – The Federal Trade Commission is sending refunds to more than 4,400 consumers who were defrauded by a telemarketing firm that promised to reduce their credit card interest rates in exchange for an upfront fee. The FTC sued Economic Relief Technologies and several related firms and individuals in 2010, accusing them of a massive telemarketing fraud. Victims were told the company would get banks to reduce their interest rates -- saving them thousands of dollars in interest -- if they paid fees ranging from $990 to $1,495, the FTC said. But after consumers paid the fees, the company did little to negotiate better interest rates and then refused to provide refunds to unhappy customers, the FTC said. The FTC obtained a settlement from the defendants, which will be used to pay refunds of between $31 and $1,300 to victims, based on how much they lost in the scam, the FTC said.
Real estate investment – Acting at the request of the Securities and Exchange Commission, a federal judge has frozen the assets of a San Diego firm that operated a real estate investment pool. The SEC alleges that Louis V. Schooler failed to tell investors about the “exorbitant markup” he charged for shares of his investment pool. His company, Western Financial Planning Corp., said it would buy vacant land in Nevada, hold it and sell it for profit at a later date. “Schooler conned hundreds of people into investing with Western by leading them to believe that they were getting a good value for plots of vacant land,” said Michele Wein Layne, director of the SEC’s Los Angeles regional office. “What he didn’t tell them was that the land was worth only a small fraction of their investment and that he was profiting at their expense.” A receiver has temporarily been placed in charge of the fund’s assets.
Time-share ‘buyers’ – The Better Business Bureau is warning owners of time-share properties that they should not pay upfront fees to a telemarketing company that claims to have found buyers for their properties and wants an upfront “transfer fee.” The company, PHB Title, claims on its website that it is based at a Milwaukee address, but the BBB says there is no such company at that address. Callers, some with foreign accents, claim to be from a title company that will double owners’ time-share investment after they pay the fee. “Our office has spoken with consumers from various states that have come close to falling for this, stopping short of wire transferring money,” said Ran Hoth, president of the Wisconsin BBB. “Thankfully, nobody has paid money, and that’s why we want to get the word out on this now.”
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