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To Rachel of Cardholder Services: Why are you still calling?

This article first appeared in the St. Louis Beacon, Feb. 20, 2012 - Dear Rachel of Cardmember/Cardholder Services,

How good of you to call the other morning, as I was working on this follow-up to a previous Beacon story about your persistent robocalls that falsely promise to help consumers reduce high interest rates on their credit cards.

Since that story was published in late December, frustrated recipients of your calls have been contacting the Beacon about your nonstop phone assault, which federal officials say is illegal. You are also the talk of consumer complaint websites, Rachel. Some people share sad stories of having lost hundreds of dollars to your scams. Most wish that assorted horrors would befall you.

Like the majority of your prey, my phone number is registered with the National Do Not Call Registry, but you call me anyway. Since there is no way to stop you, I now “press one” and speak with your minions. My goal is to see how long I can keep them on the line before they grow weary of me. My record is just over seven minutes.

On this morning, I was connected to the fast-talking “Eric” who, sadly, showed little patience with my inability to comprehend gobbledygook.

Eric: This is Eric with Consumer Cardmember Services, ma-am. Are you responding to have your interest rates lowered?

Me: Consumer … consumer … look I got this call, I don’t know who this is. And I’m trying to figure out who it is. So if you could please speak a little bit slower for me.

Eric: (speaking very slowly) Con-sum-er Card Mem-ber Ser-vi-ceeees. Did you press 1?

Eventually, Eric offered this dubious explanation of what his company does: “We service all Visa and Mastercard accounts here, ma’am. We regulate the interest rates, post payments as well as work with all 551 nationwide lenders and banks. Such as Capital One, Bank of America, Chase, Citibank, Household, you name it."

I told Eric that I was nervous about sharing personal information, so would he please explain what he meant when he said that his company “services” accounts? Does he work FOR my credit card company?

Eric responded by speaking even more slowly, impatience dripping from ev-er-y syll-a-ble: “We ser-vice aaall Vi-sa and Mas-ter-card ac-counts here, ma’am."

But what does that mean, Eric? Who are you, really?

Eric grew weary and hung up. I tried to phone him back, but the number on my Caller ID was a wireless number and the mailbox was full.


The call lasted just over three minutes. My previous record stands.

A Rachel scheme by any other name

It might seem like small consolation for people feeling harassed by Rachel robocalls, but Steven Baker, director of the Federal Trade Commission’s Midwest region, says that his agency continues to investigate robocallers and other telemarketers who do not comply with the Do Not Call Registry.

Dealing with Robocalls

The following information from consumer experts and the FTC bears repeating:

* Be skeptical of unsolicited sales calls. Rrobocallers -- like spam emailers -- are “phishing” for victims.

* Never give out your credit card information, bank account or Social Security numbers during an unsolicited telemarketing call. (The “Rachel” robocallers, may ask for your credit card number so they can “verify” your eligibility. Once they get your number, they can charge their fee directly to your account or sell your account information.)

* If your phone number is on the National Do Not Call Registry, telemarketers can legally call only if you have agreed to accept their calls. (A company can call if you have bought something within the last 18 months or  asked for information within the last three months. But if you ask that company not to call again, it must honor your request.)

* The rules for robocalls are on the FTC website.

* Register all of your phone numbers -- and make complaints -- at DoNotCall.gov or by calling 888-382-1222. Numbers on the registry do not expire.

* The FTC warns that scammers are targeting consumers fed up with robocalls by claiming to represent the Do Not Call Registry. These calls promise an opportunity to sign up for the registry but are not coming from the FTC or from the registry. (Now, that’s bold.)

"And robocalls -- prerecorded calls that are selling things -- are flat illegal,’’ Baker said.

On Feb. 8, theFTC announced that it had settled a case involving a robocalling outfit operating a Rachel-type scheme. The defendants -- F&F Payment Processing Inc., Bajada Management Group, and several individuals -- were based in Canada and New York and used a telemarketing boiler room in Orlando, Fla., to bilk consumers out of a $995 fee to reduce their credit card interest rates.

The FTC estimates that more than 13,000 consumers were defrauded of more than $13 million. The operation sometimes attempted three-way phone calls with consumers and their credit card companies -- but often did nothing at all for the $995 fee charged directly to the consumers’ credit cards. In many cases, credit card companies refused to participate in the “conference” calls.

In December, the FTC took action against a California operation using robocalls to sell credit card interest rate reduction programs, extended automobile warranties and home security systems. The robocalls were masked behind various Caller IDs, such as “Card Services,” “Credit Services’’ and “Private Office.” The agency has also brought suit against Asia Pacific Telecom, a foreign shell company for SBN Peripherals, based in Los Angeles, that allegedly made more than 370 million calls to consumers in 2009, many of them using the Rachel recordings.

Baker said he understand the public’s frustration.

“Our enforcement goal is to identify the people at all levels of these things and bring appropriate law-enforcement action,’’ he said. “Clearly, we have not solved the problem. I can tell you we are working on it, and I think it’s fair to say it’s a priority with the FTC.’’

Baker said the robocalling operations are complex, with multiple levels of participants. Separate companies own the dialing equipment and control the caller identifications. They provide the leads to companies that operate the telemarketing boiler rooms.

“If I’m a boiler room in Florida, and I want to reach consumers, one of the cheapest ways is to hire someone to do robocalls,’’ Baker said. “When people punch 1, they are automatically connected to one of my telemarketers. Then I can try to sell something, probably through deception.’’

It is also illegal to transmit false caller identifications -- which telemarketers do to mask their identities and whereabouts, he said.

In the case involving the Florida boiler room, the group used an automated calling system similar to the “Rachel” recording.

“It was very much the same scheme,’’ said John Hallerud, also of the FTC’s Midwest region.

The sales pitch, aimed at people with large amounts of credit card debt, claimed that even though $995 seemed like a large upfront fee the consumer would save so much money in interest-rate reductions that it would essentially be “free,” Hallerud said.

According to the federal court settlement, the defendants are banned from using prerecorded messages and selling debt-relief services, and their assets were frozen.

Hallerud said the amount of compensation for victims will depend on how much money is ultimately recovered.

Baker said robocallers prey upon people who are already under financial stress -– and then add to it.

“There’s a tremendous amount of people who are behind on their credit cards and probably paying high interest. There’s a large market,’’ he said.

He suggests that people who are in credit card debt reach out to a nonprofit credit counseling agency.

Baker also cautions people to be careful about giving out their phone numbers when responding to various marketing promotions, such as vacation and car giveaways.

“Those are leads, and those are sold to telemarketers,’’ he said. “People will give out a lot of personal information if they think they’re going to win something.’’

We hear from Rachel-haters

Two months after our first “Rachel” story was published, fed-up consumers continue to contact the Beacon to vent their frustrations. Most are registered with the Do Not Call Registry and have made numerous complaints to the FTC.

Because Rachel is not a newbie -- her recorded voice has been used for years by countless operations -- many people said they no longer answer if their Caller IDs indicate 800 or 888 numbers or vague corporate names. But robocallers often mask their identities with fake numbers and Caller IDs that appear to be legitimate.

The simplest action, of course, is to hang up on the recording, but for some people who have been inundated by the calls, that is not enough.

A woman from New York estimated that she received 300 to 400 “Rachel” calls last year. “I have hung up, ignored, ‘Pushed 1’ to talk to a rep, played their game to see if I could get a name or physical address,’’ she wrote in an email. “Today, I finally lost my cool and yelled a bit, only to be called an idiot and hung up on during an actual argument with the ‘agent.’ After reading many stories about others' experiences, I have to say that being called an idiot is one of the nicer names that these scumbags have delivered to their ‘customers.’ ’’

An Oregon man reported that he had just filed another complaint with the FTC but was grateful for the publicity about the annoying problem. A woman from Dayton, Ohio, called the Beacon offices to tell us about her extreme measure: She bought a police whistle and now blows it into the phone when a “Rachel” representative answers.

Some have done amateur sleuthing to try to track down the source of their “Rachel” calls, and they post their findings on consumer websites. Others have joined the Facebook page “Shut down Rachel From Cardholder Services.”

The FTC’s Baker urges consumers to continue to report the calls at DoNotCall.gov. The agency compiles the data and uses it to establish patterns for tracking the illegal operations.

“The complaints are important, and it takes about 30 seconds to make a complaint online,’’ he said.

A few people have posted on websites that they received unusual “Rachel” calls, as I did several months ago -- possibly engineered by an employee working in a scammer’s telemarketing boiler room.

On that one day, my Caller ID revealed the honest truth about Rachel’s identity. It said: “PHONE SCAM.”

Congratulations, Rachel-buster, whoever -- and wherever -- you are. You scored one for the rest of us.

Mary Delach Leonard is a veteran journalist who joined the St. Louis Beacon staff in April 2008 after a 17-year career at the St. Louis Post-Dispatch, where she was a reporter and an editor in the features section. Her work has been cited for awards by the Missouri Associated Press Managing Editors, the Missouri Press Association and the Illinois Press Association. In 2010, the Bar Association of Metropolitan St. Louis honored her with a Spirit of Justice Award in recognition of her work on the housing crisis. Leonard began her newspaper career at the Belleville News-Democrat after earning a degree in mass communications from Southern Illinois University-Edwardsville, where she now serves as an adjunct faculty member. She is partial to pomeranians and Cardinals.