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Avoiding Illegal Robocalls

Protect your money from automated telemarketing scams

by Sid Kirchheimer, AARP

En español | Remember "Rachel from cardholder services?" She was the recorded voice announcing an "important message about your credit card" and promising a way to reduce its interest rate. Though she was recently forced into early retirement by the Federal Trade Commission, similar calls have kept coming, sometimes several times a day.

Yet these automated robocalls to pitch goods and services are illegal, unless the seller gets written permission from you to receive them.

Man holding red phone, Scam alert for robocalls posing as cardholder services

Jason Verschoor/Istockphoto

Robocall scammers will claim to be with well-known credit card companies and seek ways to get your personal information.

But that's not the worst part. If you press 1 as you're urged to do, you're connected to a telemarketer, who may falsely claim to be calling from, or on behalf of, your credit card issuer, your bank or a government agency — lies that are also illegal.

Then you're asked about your current credit card and interest rate. Depending on your answer, you may be told that you can save at least $2,500 in finance charges and pay off balances up to three times faster — without increasing monthly payments.

Interested? That prompts a request for your financial and personal information, says the FTC, sometimes for a purported audit (or verification) to determine whether you qualify for the rate-lowering offer. In reality, says the agency, this is used to determine whether you have enough credit available on your credit cards to pay the company's fee.

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And that fee can be as high as $3,000, with no guarantee that you'll get the rate reduction.

Sometimes fees are disclosed up front; other times you're told the process is free. In five cardholder services calls I recently received, I played along to see what con was being offered. I was told that if I qualified after providing my card details, my rate reduction would cost nothing. (One caller claimed to be a representative of a well-known credit card who said the rate reduction was a "free courtesy for years of loyal patronage." I don't even have an account with that card company.)

After ending one rate-reduction operation a year ago that bilked some 13,000 customers out of an estimated $13 million, the FTC in December disbanded six similar schemes in just over a month, including the company behind "Rachel." And most recently the agency mailed refund checks to hundreds of consumers that they identified who were allegedly duped a total of $350,000 by a company that used robocalls to deceptively claim it would lower credit card interest rates.

The bottom line: If you want to reduce your interest rate, give it a try yourself by calling your credit card issuer. There's no guarantee you'll succeed, but you never know unless you try.

Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.