A Blow to the 'Wal-Mart Shopping Spree' Scam
Here's how the scam worked: Consumers got telephone sales pitches offering gift cards -- usually $200 to $500, mostly from Wal-Mart, but also from Kmart, JCPenney, Macy's and other retailers. To receive the cards, the consumers were asked to first pay a shipping and handling fee ranging from $3.49 to $4.95. The callers wanted payments made through consumers bank accounts and demanded the account information over the phone. If a consumer declined, they often were called repeatedly and sometimes threatened until they relented, the FTC said.
Of course, the gift cards never arrive. Even worse, once the callers had the bank account numbers, they kept drawing money from the accounts.
The FTC estimates that tens of millions of dollars were obtained through the scam, which it calls a deceptive and abusive telemarketing practice. It has received more than 2,000 complaints.
This week, the FTC said it had won a temporary restraining order from the U.S. District Court for the Central District of California in Los Angeles. The court also froze the firms's assets. The agency's goal is to obtain a judgment, either through trial or a settlement, and to get some refunds for consumers. For now, if consumers have more questions, they should call 202-326-2090.
The FTC's action was against a number of firms that the agency believes are all related: Universal Premium Services, Inc., also known as Premier Benefits Inc., of Orange, Calif.; Consumer Reward Network Inc., of Canoga Park, Calif.; Star Communications LLC, of Los Angeles; Membership Services Direct Inc., aka Continuity Partners Inc., of Las Vegas and Connect2USA Inc., of Las Vegas.
March 1, 2006; 12:11 PM ET
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