Zero Percent Forever? The FTC's Robocall Case Against First Choice Horizon

If you hear that on a robocall, hang up. If you're the one saying it, well ... keep reading.

So what happened?

In June 2019, as part of its "Operation Call it Quits" robocall crackdown, the Federal Trade Commission (FTC) announced a case in federal court in the Middle District of Florida (case no. 6:19-cv-1028) against a group of companies doing business first as CSG Solutions and then as Second Choice Horizon. The FTC said Raymond Gonzalez, Carlos S. Guerrero and Joshua Hernandez ran what it called a "maze of interrelated operations."

The targets, according to the FTC: financially distressed consumers, often seniors.

The pitch

According to the FTC's complaint, the defendants:

• Robocalled consumers, including many whose numbers were on the National Do Not Call Registry.
• Promised that, for a fee, they could lower credit card interest rates to zero percent permanently, for the life of the debt, saving thousands of dollars.
• Delivered teaser rates instead. People got promotional zero percent rates that only lasted a limited time, and then the rate went up significantly.
• Hid the fees. Consumers weren't told about substantial bank or transaction fees.
• Collected Social Security and credit card numbers "under the guise of confirming consumers' identities."

And here's the part that made my stomach turn. According to the FTC, in many cases people who didn't even buy the service later found out the defendants had applied for credit cards in their names without their knowledge or consent.

Read that again. They didn't buy. And they still got credit cards opened in their name.

Read the FTC's amended complaint against CSG Solutions and First Choice Horizon.

How it ended

In July 2020, the FTC announced a settlement. The order bans the defendants from:

1. Any involvement in selling debt relief products or services.
2. All telemarketing.
3. Applying for any product or service for a consumer without their knowledge and consent.
4. Getting cash advances on a consumer's card or submitting billing information without prior approval.
5. Using or benefiting from any consumer information collected through the scheme.

It also imposes a $13,881,865 judgment, partially suspended for their inability to pay.

"Companies that cold-call consumers with big promises to lower consumers' credit card interest rates and purportedly save them thousands of dollars are likely scams," said Andrew Smith, then Director of the FTC's Bureau of Consumer Protection.

Why should you care?

Look, I've said it before. Credit card interest rate reduction is one of the most-sued pitches in telemarketing. There's a reason.

• Don't promise what a bank controls. You can't guarantee a rate.
• No up-front fees for debt relief. The Telemarketing Sales Rule (TSR) is clear on that.
• Collect only the data you need, and never use it for anything the customer didn't agree to.
• Sales robocalls need prior express written consent. No consent, no call.

It's not rocket science. If your pitch only works when people aren't paying attention, it's a lousy pitch.