Marketers behind the "Platinum Trust Card" and the "Express Platinum Card" can never sell credit cards or make cold calls again, according to the Federal Trade Commission. According to FTC officials, a Philadelphia company operating under the names Apogee One Enterprises and Marquee Marketing used telemarketing services to pitch platinum credit cards that they claimed would work with merchants who accept Visa, MasterCard, and American Express. FTC investigators learned that the marketers called consumers who had applied for payday loans online, promising instant credit limits of up to $9,500 in exchange for a $99 advance fee and a $19 monthly fee. However, the card's customers learned that they could only use their new credit lines at the card's own online store. FTC officials told reporters that the marketers sold "off-brand, overpriced products" and failed to honor promises to report cardholder activity to the three major credit bureaus.
Credit card marketers must close up shop, say investigators
To avoid prosecution, company principals Blake Rubin, Chase Rubin, Justin Diaczuk and their organizations must pay fines and restitution amounting to $7.5 million. While admitting no guilt, the settlement blocks the marketers from getting back into business or benefiting in any way from consumers' credit profiles. Investigators froze the companies' assets in February after responding to consumer complaints related to unauthorized checking account deductions. The settlement caps off an investigation that began in January, as part of the FTC's initiative to target companies that violated the FTC Act and the FTC's Telemarketing Sales Rule. According to FTC officials, many telemarketing scams use online payday loan applications to identify potential victims. Boiler room operators promise instant approval credit cards with no credit report pulls, while asking for upfront fees or bank account information. Current Federal Reserve rules limit a credit card's annual service fees to 25 percent of an account's credit limit. However, pending litigation seeks to resolve the question of whether a bank can assess an application fee or a processing fee before a new account is officially opened. FTC officials advise consumers to avoid doing business with anyone who demands immediate payment for a new credit card over the phone.