Earlier this month, the Federal Trade Commission issued refunds to consumers who had allegedly been defrauded by the Florida-based company Integrity Financial Enterprises. In the approximate amount of $200 each, the checks are not the first issue the FTC has had with the company in recent years. Last year's sweep, which the FTC affectionately refers to as "Operation Tele-PHONY," resulted in charges brought against the aforementioned company, its owner, its associates and others.
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The allegations against Integrity Financial Enterprises consisted primarily of misrepresentation of the company's advanced fee credit cards. Consumers nationwide had expected to use the card for any and all purposes when, in fact, the card could only be used to procure products through the company's own website and mail-order catalogs.
Zealous telemarketers pushing the product were said to have pitched it as a "good credit card option for those who would not otherwise qualify for a line of credit." Consumers who accepted the cards were charged an up-front fee of $200-300, with a promise that they would receive a card with a credit limit of $2,500 to $7,500, which could be utilized the same as any Visa or MasterCard. They were also promised a voucher that could be put towards the future balance of their card, thus re-rewarding them the advance fee. Consumers were also reported saying they were told that the company would honor any requests to cancel or change their orders, should the need arise, so as to avoid the debiting of the advance fee from their bank accounts.
After receiving permission to send the card, consumers were then asked to provide personal information, including bank account information and routing numbers that would allow the company full access to withdraw funds from their accounts. Following the initial sales pitch, consumers were then directed to listen to a verification message that consisted of fast speaking, computerized voices that spoke in complex terms. Those who could understand the sales jargon were shocked to find that they had been deceived by the salesperson, and had agreed to such terms as buying only through the company from which the card was purchased, and were also charged multiple fees that would be directly debited from their personal bank accounts. Even consumers who did successfully cancel their cards were still charged, not only the up-front fee, but a $35 early termination fee as well.
The case against Integrity Financial Enterprises was settled with the FTC in December, and the company has since been prohibited from misrepresenting their product. They were forced to relinquish all financial assets to the FTC and were sanctioned a monetary fine of $2.4 million. The FTC is currently using the money procured from the case to repay consumers who feel that they were victimized by Integrity Financial’s shady business practices.
The FTC hopes that this will serve as a strong reminder to all consumers to listen carefully to what a company is selling, and to inquire about all services prior to giving any verbal agreement, especially before providing them any of your personal information over the phone. Any person who feels they may have been deceived by fraudulent, deceptive, or unfair business practices are encouraged to report such activities to the Federal Trade Commission directly.
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