Illegal Robocalls: Now We Know What "Card Services" Was Selling

Feb. 13, 2012— -- Have you received one of those automated calls from "Rachel" or "Card Services" or a similar company, stating they have important news about your credit card interest rate? Who hasn't? Well, guess what? It's not only annoying, it's illegal.

Companies are no longer allowed to robocall you, unless they have your written permission. Who would give that permission? For that matter, who would do business with a company whose initial approach is an illegal phone call? Well, turns out, plenty of people.

The Federal Trade Commission has just reached a settlement with a company called F&F Payment Processing, which often used the name "AFL Financial Services" when employees called consumers. I'm always too busy to click through and find out what the company is pushing, but now we know what those calls were about. The FTC says consumers who pressed the button to speak to a live human got a sales pitch promising to lower their credit card interest rates for them for a fee of $995.

Here's the upsetting part: The FTC says approximately 13,000 consumers went for it, bringing in $13 million for the company. The FTC alleges the company then either failed to get the consumers' rates lowered or didn't even try. So people with financial problems got more trouble instead of help. Without admitting guilt, F&F reached a final settlement with the FTC, agreeing to stop making robocalls and stop selling debt relief services. The company has also agreed to pay fines and meet other conditions.

Here's why I dredge this up. There are some lessons to be learned.

• Don't Do Business with Robocallers: First of all, never do business with a company that robocalls you without your permission. These calls are illegal unless you gave written permission. (Automated calls to confirm delivery of something you purchased or let you know your flight has been delayed and that sort of thing are still allowed.) If a company is willing to make an illegal call, chances are the rest of their dealings with you will be sketchy too.

• Legitimate Robocalls must let you opt out: If, for some reason, you HAVE given written permission to a company to robocall you, they must provide multiple prompts during the call that let you opt out of future calls. Or if the automated message is left on your voicemail, they must provide a toll free number to call and opt out.

• Don't pay for things you can do yourself: And use extreme caution if anybody wants to charge a fee for something you can do yourself. Have you ever tried calling your credit card company to ask for a lower rate? The card companies are not as generous about this these days, but it still often works. It's 15 minutes of your time that could save you thousands.

• Debt Settlement can be a self-help project: If your debts are big enough that they're beyond the help of a new, lower rate, then even debt settlement is something you can accomplish on your own. Many companies sell this service, but if you are deep in debt, it's tough to justify spending MORE money for a company to help you with your debt. At least try calling your credit card companies and offering to pay them less than you actually owe to settle the account. It could kill your credit score for seven years, so I only suggest this to people in desperate straits.

• Consider LEGIT Credit Counseling: And finally, if your debt is troubling you so much that you would actually be tempted by a call from a stranger, then YOU make a call to a stranger, a RELIABLE stranger. It's always better to "be the hunter than the hunted," meaning do business with organizations YOU seek out rather than those that come looking for you. The old fashioned Consumer Credit Counseling Service still provides low cost or no cost credit counseling. You can find the non-profit affiliate nearest to you here.