Credit Relief Offer Could Lead to More Debt – Money Perception

If you’ve got credit card debt, beware of phone solicitations promising relief. You may end up deeper in debt.

Renee Brooks, a mother in District Heights, Maryland, wants to move her daughter to a safer neighborhood. When she got a call to lower her credit card rates, she jumped at the chance.

“They said, ‘This is not a debt collector, this is someone trying to lower your interest rate,’” Brooks said.

The caller said she worked for Educare Center Services and said she would contact Brooks’ credit card company to try to negotiate a lower rate. The caller put Brooks on hold and a few minutes later broke the bad news.

“They called Capital One, they did call one of them to see if they’d lower the interest rate. They denied it,” Brooks said.

But the caller offered something else, Brooks said.

“The something else was to get an additional card,” she said.

The card was offered with a zero percent interest rate for 14 months. The caller was persistent and convinced Brooks to sign up for the card. The caller also put Brooks on a payment plan for credit card services and would debit her bank account for a total of $798 over five months, Brooks said.

“They were like, ‘You can just try it and if you don’t like it, you can cancel anytime,’” Brooks said.

When she tried to cancel two days later, Brooks was told the fee was non-refundable.

Brooks’ bank agreed to block the withdrawals, and Brooks blocked calls from the company.

Brooks could have called the customer service number on the back of her credit card and, with a little patience and persistence, had her interest rates lowered for free, according to the FTC.

Last month, the FTC closed the book on the company that pitched the phony rates to Brooks. A federal judge entered eight orders against a web of people and companies responsible for offering the interest rate reduction program. The orders imposed financial judgments and banned most of the defendants from robocalling, telemarketing and ever offering debt relief services again.