Finance Globe

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FTC Shuts Down "Cardholder Services" Calls

The Federal Trade Commission says it receives more than 200,000 complaints about telemarketing robocalls each month. Many of the complaints are from “Rachel from Cardholder Services” as part of a credit card rate reduction scam. Thankfully, millions of these calls will cease as the FTC recently gained a court order to stop five companies from making these calls.

Rachel's Scam

In this credit card rate reduction scheme, the telemarketer claims to be from cardholder services and says she can help you lower your credit card interest rate and finance charges, thereby helping you get out of debt faster. Rachel promised she could save thousands of dollars in finance charges and help consumers pay off their debt two to three times faster. In a time where consumers are struggling to get out of debt, a lower interest rates and freedom from debt would be a godsend.

The services weren't free. According to the FTC, fees from the Rachel and her associates ranged from “several hundred dollars to nearly $3,000.” Some consumers were charged even when they didn’t agree to the service or when they weren't told there would be a fee.

Once consumers agreed to the service, the telemarketer called the credit card issuer on three-way and requested a lower interest rate. Credit card issuers, more than likely already aware of the scam, denied the interest rate reduction request. While refunds were promised to consumers who didn’t get a benefit from the service, i.e. their interest rate wasn’t lowered, consumers complained that they didn’t receive a refund as promised or that the scammers made it difficult to get the refund.

What to Do About Robocalls

The best thing to do if you get unsolicited, pre-recorded calls: just hang up. These calls are almost always requests to get you to sign up for some sort of service. Don’t press any numbers, not even the option to stop future calls. The calls are probably illegal, especially if it’s a sales message. Furthermore, telemarketers are prohibited from charging upfront for debt reduction services. But, any company making an illegal sales call probably has bad intentions including scamming you out of as much money as possible while providing no benefit in exchange.

Companies who make robocalls have the capability of making millions of calls every day and they often ignore the Do Not Call registry. The companies usually aren’t stopped until the FTC steps in after receiving complaints from consumers.

Stopping these calls from reaching your phone is virtually impossible. Your phone service provider may have a service that blocks calls from 1-800 numbers, however, you risk blocking legitimate calls, too. Changing your number may work temporarily, but as more companies get your phone number, the calls may resume again. Screening your calls is probably the best option.

You can report robocalls and related scams, even if they’re not for credit card rate reduction services, to the FTC by visiting or calling 1-888-382-1222. Also report these calls to your state Attorney General. You can find your state Attorney General’s contact information at Or do an internet search for your state’s name plus the words “attorney general.”

Lowering Your Interest Rate on Your Own

Requesting a lower interest rate is something you can do on your own, for free, and probably with more success if you did it alone. You could negotiate with the credit card issuer, citing your positive account history or good credit standing as a bargaining chip. And if you're not successful, at least you're not out of a ton of money.

You might also work with a consumer credit counseling agency to enter a debt management plan that would result in a lower interest rate. Credit counseling services may have a small monthly fee that you can often have waived if you're facing financial hardship. To find a credit counselor, visit the National Foundation for Credit Counseling’s website at

Source: Federal Trade Commission
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Friday, 12 April 2024

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