Robocalls selling dubious debt assistance plague Canadian Consumers

Consumers across Canada are sounding off to Better Business Bureau about incessant automated telemarketing calls promising to lower interest rates on their credit cards.

Not only are the calls a nuisance, but they often avoid violating Canadian Do-Not-Call laws because they originate outside of Canada. Consumers have reported receiving calls on both their cell and home phones even when they have registered the numbers with the federal Do-Not-Call list. Consumers also tell BBB that, despite their requests to the telemarketers to stop calling, the calls continue to come.

“Some companies behind the calls are ripping off consumers by charging large up-front fees to negotiate lower interest rates with credit card companies,” said Lynda Pasacreta, BBB President and CEO.

According to figures cited by the Certified General Accountants Association, Canadian household debt is at an all-time high reaching $1.3 trillion last year and the escalation of debt is primarily caused by consumption motives rather than asset accumulation. Knowing that so many families are drowning in debt, telemarketers offering suspect financial assistance are taking full advantage of the situation.

BBB has received numerous complaints about two Orlando-based companies, CSTR Solutions, Inc., Genesis Capital Management, and one Tacoma-based company, Mutual Consolidated Savings. All are behind at least some of the robocalls and are promising to save people anywhere from $2,000 to $25,000 by negotiating lower interest rates with credit card companies.

Robocalls generally begin with recorded messages that include statements like: “There are no problems currently with your account, however it is urgent that you contact us concerning your eligibility for lowering your interest rates to as little as 6 point 9 per cent.” or, “This is our final attempt to reach you since you’ve not responded to our other calls to discuss your credit card debt.” The automated message invariably does not include the name of the company, but may claim to be with Card Services or Card Holder Services. Complainants note to BBB that they now believe the calls were designed to deceive them into thinking their credit card company was contacting them.

After the initial recorded message, consumers must dial another number to be connected to a live person. The live “operator” usually starts the sales pitch by asking for the consumer’s credit card number and whether the consumer is interested in lowering their interest rates. From there, callers begin closing the sale, asking if the consumer is willing to pay – usually from $700 to $1,000 – to have their firm contact the credit card company and negotiate lower rates.

“The ‘negotiation’ undertaken by these companies can be as simple as calling the customer service number listed on the back of the consumer’s credit card and asking a customer service representative to lower the interest rate,” added Pasacreta. “Consumers are fully capable of talking to credit card companies on their own, for free, and getting similar results. Consumers simply don’t need to pay any company a thousand dollars to negotiate lower rates on their behalf.”