Stop montly withdrawal from my bank acc
Complaint
Mohammed Saad
Country: United States
I have received a monthly charge on my Bank of America account for $40 dated Feb09. I did receive a phone call claimed to be from Bank of America some time ago to try a certain insurance for a trial period. to be followed by more details.Nothing was received until I got a charge of $40 off my acc. I wrote to B of A who did not seem to know who the "merchant" was. I want to CANCELL this montly charge effective immediatly and the $40 charged to my acc reversed.
Thanks
Mohammed
Thanks
Mohammed
Comments
http://consumerist.com/5337350/discover-custo ... protection-plan
"...
Two weeks ago, I was cold-called by Discover with an offer of a Platinum Package, as a premium cardholder, whatever that means. Since it was vague and ambiguous, I was explicitly clear to your employee, more than once, that I do NOT accept registration or enrollment in anything over the phone, but that I'd be willing to read the program terms if information was mailed to me for review. Your employee was adamant, and repeatedly answered that I would NOT be enrolled in anything, that I was only giving them permission to mail me an information packet, and I could choose to enroll or not when I had reviewed the package. The next day, another employee called me back, apologizing and saying a computer glitch had corrupted my call information; I reiterated my position, and again received assurances that I would not be enrolled in anything. Since I was clear, received repeated assurances that I wasn't signing up for anything, and had thus far had a wonderful experience with Discover, I agreed to receive the package.
Imagine my surprise when, in the mail today, I received an enrollment confirmation for Discover's Payment Protection plan, to be billed at $0.89/$100 every month. Not only that, there were no clear instructions on how to cancel, although I did manage to do that by calling the information number and getting a representative on the line.
..."
They are being careful to label this as "not insurance" and avoid offering it in states that regard it as insurance, probably because they are not licensed to sell insurance.
https://www.discovercard.com/discover/data/st ... ard_popup.shtml
"...Discover Payment Protection is not insurance.
...
Debt Cancellation is not offered or available to residents of AK, IA, NV, OR, RI, TN, WI, PR, GU, VI, or any other state or territory where it is regulated as insurance.
..."
http://www.ripoffreport.com/Discover/Telemarketers/Discover-Payment-Protection-Pl-C3FC8.htm
"How you may have been signed up
I was a former employee of Epixtar Marketing, the company that is hired by discover to market their products. It appears that there is some mis information on the page that needs to be cleared up.
1. None of this is discovers fault.
2. Epixtar does not follow discovers guidelines for marketing their product, but has changed the script allowing it to be assertive, with very low commitment and hard closes. The script epixtar is supposed to use (the one written on their computer screen tells you all of the information straight forward and politely asks you if you are interested. However, this is not the case with the Epixtar script, which is the one you have all heard. Below is the epixtar script, which I imagine won't be up for very long.
..."
What follows is a hard-sell script with deceptive rebuttals and blurring of whether the consumer is being sent "information" or actually "enrolling". Only the part of the approved script summarizing the plan terms where the consumer acknowledges they understand the terms is recorded.
Epixtar appears to have a number of telemarketing call centers in various states, as well as an overseas call center in the Phillipines.
http://www.ftc.gov/os/caselist/0323124/0323124.shtm
FTC settlement with Epixtar for deceptive telemarketing and illegal billing ("cramming" onto phone bills) on ISP and web service, going back to 2001.
Same tactics as the "payment protection" telemarketing, only the "product" has changed. Same "free trial", "negative option", billing when consumers only agreed to review the product information, unauthorized billing when they already have account information to bill to, just targeted at small businesses instead of telemarketing to bank customers.
They appear to still be subject to the consent order on this settlement.
Note the settlement requirement to record consumer authorizations, and note above how the ex-employee outlines how to modify the script to deceptively record an "authorization", effectively nullifying the attempt to use recording to provide safeguards against false claims of authorizations.
http://www.ftc.gov/opa/2006/11/sbaonline.shtm
"For Release: November 21, 2006
Court Takes Webcrammers to Task for Deceiving Consumers
Principals Barred from Misrepresenting the Terms of ISP Services They Provide; Refunds of $3.6 Million Already Issued with More to Come
At the request of the Federal Trade Commission, the District Court for the Southern District of New York has permanently banned a group of Miami-based defendants from making misrepresentations when selling Internet Service Provider (ISP) services to consumers in the future – via telemarketing or any other means.
In 2003, the FTC charged the defendants with defrauding consumers they called to sell services such as Internet access and Web site design. The court order announced today also prohibits the defendants from billing consumers without first obtaining their consent – which they must record – and provides strict rules they must follow to ensure that consumers the defendants call are protected from fraud and deception. Finally, the order establishes a program through which defrauded consumers can obtain refunds from the defendants.
The court order announced today settles the Commission charges against: Epixtar Corp.; Liberty Online Services, Inc.; National Online Services, Inc.; B2B Advantage, Inc., formerly known as SBA Online; and William Douglas Rhodes, President of Epixtar, Liberty, National, and SBA Online.
The Commission’s Complaint: In its original complaint, filed in 2003, the FTC alleged that since December 2001, the defendants telemarketed Internet services to small businesses and non-profit organizations such as churches or community service organizations nationwide. The defendants typically claimed they were calling from an actual business telephone directory and that they simply were calling to update the consumer’s business information, leading consumers to believe they had a pre-existing relationship with the defendants. In their sales pitch, the defendants claimed consumers could try SBA Online’s services free for 30 days, with no obligation to pay, and told consumers they could cancel the free services at any time. The defendants also allegedly imposed the 30-day trial on consumers without allowing them to refuse the offer.
The Commission further alleged that the defendants violated the FTC Act by failing to disclose adequately: 1) that consumers must cancel SBA Online’s Internet services before the end of the free trial period, or their business automatically would be billed $29.95 plus tax each month on their telephone bill; 2) the prescribed manner in which the consumer must cancel the trial service, and other specific steps the consumer must take to avoid the charges; 3) the inception and expiration dates of the trial service; and 4) the date the defendants would submit the charges for payment.
The complaint charged that SBA Online unfairly billed consumers without their express informed consent, in violation of the FTC Act and that the defendants charged some consumers who said they were not interested in the service and ended the sales call. In other instances, the defendants allegedly asked consumers to review a packet of written information and then contact them if they were interested in the offer. When consumers agreed simply to review the information, the defendants allegedly never sent it, but began billing consumers anyway. Finally, according to the FTC, consumers often had trouble contacting the defendants to cancel the services and obtain a refund and that in many cases the defendants agreed to cancel the services but refused to refund consumers’ money or agreed only to provide partial refunds.
Terms of the Final Order: The final order filed with the court prohibits the defendants from engaging in the deceptive practices alleged in the Commission’s complaint. Specifically, it bars them from making misrepresentations in the sale of ISP services, whether they are offered via telemarketing or any other means. It details specific disclosures the defendants must make to consumers during sales pitches, including who they are, that the call is a sales call, and what they are selling. It also bars the defendants from misrepresenting anything about the sales offer, including negative-option features and cancellation terms.
The order next prohibits the defendants from billing consumers, or receiving money from them, without their express informed consent, and requires them to record the consumers’ consent to be billed during the sales pitch. The defendants also are barred from selling or otherwise transferring their customer lists to anyone else.
Next, the order provides for continued consumer redress in the same way it has occurred since the court entered the preliminary injunction against the defendants. Under the redress program, consumers are eligible to receive a refund or credit directly from the defendants, from their local telephone carrier, or from the billing company. The order also provides for the use of an impartial “Referee” in cases where there is a conflict between what the consumers and the defendants claim is owed as a refund.
Finally, the order contains a clause that would allow the FTC to reopen the case if defendant William Douglas Rhodes – the companies’ principal – is found to have misrepresented his financial condition. In such a case, he would be immediately subject to a $33 million court judgement. The order also contains monitoring and record keeping terms to ensure the defendants’ compliance.
..."
Note the detailed requirements for "Making and maintaining an audio or digital recording of the entire telemarketing transaction with the Line Subscriber, whether or not the sales transaction and its verification are conducted".
This document is virtually a summary of the many ways a telemarketer might engage in deception, through what it requires that this one do and not do.
http://www.ftc.gov/os/caselist/0323124/061120finalorder.pdf
"...
B. Obtaining from the Line Subscriber his or her express agreement to be charged for the ISP Services and to be charged using the aforesaid telephone number or account number;
C. Making and maintaining an audio or digital recording of the entire telemarketing transaction with the Line Subscriber, whether or not the sales transaction and its verification are conducted
-7by
the same telemarketer or seller; provided, however, that where bound by state law to obtain consent to record the transaction, Defendants, or their successors and assigns, may, before beginning to record, only: 1) ask for permission to tape record the transaction; and 2) state that this is an offer from a seller. Defendants, or their successors and assigns, must reiterate any such statement when they begin recording;
...
IV. AUDIO RECORDING OF TELEMARKETING TRANSACTIONS
IT IS FURTHER ORDERED that, in connection with the audio recording of entire telemarketing transactions required pursuant to this Order, Defendants, their successors, assigns, officers, agents, servants, employees and those persons in active concert or participation with
-9them
who receive actual notice of this Order by personal service or otherwise, are permanently restrained and enjoined from accepting or processing any such transaction unless the audio recording meets the following criteria:
A. The audio recording must clearly and accurately reflect the consumer’s agreement to record the telephone call, as provided for in Paragraph II.C. above; and
B. The audio recording must include, in volume, tempo, and cadence sufficient for an ordinary consumer to hear and comprehend, clear and conspicuous disclosures of all material terms of the offer and the consumer’s express agreement to those terms. The material terms disclosed in the recorded conversation shall be consistent with any material terms previously disclosed to consumers. For purposes of this Paragraph, material terms include, but are not limited to:
1.
The information contained in Paragraph I.B. of this Order;
2.
Which, if any, of the products or services are free and, if applicable, the length of the free offer;
3.
The amount of any set-up, monthly, or recurring fee;
4.
The manner in which such fee will be billed; i.e., by credit card, directly, on a consumer’s telephone bill, or otherwise;
5.
If applicable, the means by which a consumer may cancel the services without incurring any cost or obligation;
6.
If applicable, the date by which, or time period within which, a consumer must cancel the services to avoid being charged a fee; and
7.
Defendants’, or their successors’ and assigns’, toll-free telephone number.
"...
The re-named operations now include contact centers in Duluth, Minnesota; Wheeling, West Virginia; and Pittsburg, Kansas. The Company has back office and network operations located in Charlotte, North Carolina and a contact center in Manila, the Philippines. This complements Epixtar's existing facilities in Eastwood City, CyberPark in Manila; Alabang, a suburb just south of Metropolitan Manila; Clark Special Economic Zone (formerly Clark Air Force Base), bringing Epixtar to seven world-class production facilities, two network centers, and its headquarters in Miami. The company now employs over 2,000 people, distributed evenly between the United States and the Philippines.
The recent acquisition brought the Company's current capacity to approximately 1,400 operating workstations with 4,000 additional workstations scheduled for completion by the end of the year. Expansion will include the recently acquired lease at Aseana Business Park in metro-Manila and a possible location at the former Subic Bay Naval Base. The Company is also exploring potential acquisitions in Latin America.
..."
"et al" includes Chartered Benefit Services, Inc. (now known as Chartered Marketing Services Inc., and now part of Intersections Insurance), Global Contact Services (also doing "affiliate telemarketing" partnered with financial institutions), and Direct Marketing Association (DMA), a trade organization.
Decision in 2003 on crossed motions for summary judgement related to amendments to the Telemarketing Sales Rule known as the Final Amended Rule, which implemented the national Do Not Call list, placed restrictions on use of predictive automatic dialers, and restricted telemarketer's use of "preacquired account information", defined as:
"any information that enables ... a telemarketer to cause a charge to be placed aagainst a customer's ... account without obtaining the account number directly from the customer ... during the telemarketing transaction pursuant to which the account will be charged/"
http://fl1.findlaw.com/news.findlaw.com/wp/docs/ftc/donotcall92303ord.pdf
Issues involve Telephone Consumer Protection Act (TCPA), Telemarketing and Consumer Fraud and Abuse Prevention Act (TCFAP), and FTC's regulations to implement these, the Telemarketing Sales Rule (TSR). The telemarketers were opposing restrictions in the TSR Final Rule, related to both the national Do Not Call list, predictive dialer regulations, and telemarketing use of preacquired account information.
They appeared to argue that FTC did not have statutory authority to apply the TSR to financial institution related telemarketing.
Note the requirements of the Final Rule, confirmed in this decision, that in any telemarketing transaction involving preacquired account information and a "free-to pay conversion" feature, the telemarketer must not only obtain from the customer, at a minimum, the last four (4) digits of the account number to be charged and his or her express agreement to be charged but also must make and maintain an audio recording of the entire telemarketing transaction.
They may have won on the DNC issue, but FTC won on all other issues, specifically on TSR Final Rule restrictions on use of preacquired account information, as these restrictions were related to preventing fraud and unfair practices covered by the FTC Act.
"Telemarketing Sales Rule, 16 C.F.R. Part 310
Index of Rulemaking Record for the Final Amended Rule
Published in the Federal Register on January 29, 2003 and Effective on March 31, 2003
..."
http://www.ftc.gov/bcp/edu/pubs/business/marketing/bus27.shtm
"...
Exemptions to the Amended TSR
Some types of businesses, individuals, and activities are outside the FTC’s jurisdiction, and therefore, not covered by the TSR. Certain calls or callers are exempt from the Rule, too. Moreover, some of the exemptions from the original Rule have been narrowed in the Amended Rule. As a result, some calls or callers may be completely exempt or they may be partially exempt — that is, they may have to comply with some of the Rule’s provisions. The following sections explain the coverage of the Rule and the exemptions. Be aware that the FCC also regulates telemarketing practices; its jurisdiction extends to some entities and activities that are not subject to regulation by the FTC. For more information about the FCC’s rules, visit www.fcc.gov.
Some Types of Businesses and Individuals
Some types of businesses are not covered by the Rule even though they conduct telemarketing campaigns that may involve some interstate telephone calls to sell goods or services. These three types of entities are not subject to the FTC’s jurisdiction, and not covered by the Rule:
banks, federal credit unions, and federal savings and loans.
common carriers — such as long-distance telephone companies and airlines — when they are engaging in common carrier activity.
non-profit organizations — those entities that are not organized to carry on business for their own, or their members’, profit.
These types of entities are not covered by the Rule because they are specifically exempt from the FTC’s jurisdiction. Nevertheless, any other individual or company that contracts with one of these three types of entities to provide telemarketing services must comply with the Rule.
Examples:
A nonbank company that contracts with a bank to provide telemarketing services on the bank’s behalf is covered.
..."
Note that telemarketing companies contracted by banks ARE covered.
"...
Oral Disclosures in Outbound Sales Calls and Upselling Transactions
An outbound call is a call initiated by a telemarketer to a consumer. The Rule requires that a telemarketer making an outbound sales call promptly disclose the following four items of information truthfully, clearly, and conspicuously:
The identity of the seller. The seller is the entity that provides goods or services to the consumer in exchange for payment. The identity of the telemarketer, or person making the call, need not be disclosed if it is different from the identity of the seller. If the seller commonly uses a fictitious name that is registered with appropriate state authorities, it is fine to use that name instead of the seller’s legal name.
..."
Note that if Chartered is calling consumers, and claiming to be Bank of America, EITHER the seller MUST be BofA, in which case BofA's claim that the charge is from a third party is false, OR Chartered is violating TSR by falsely claiming the sale is by BofA, and they should be disclosing their OWN name as the seller.
"...
Misrepresentations are Prohibited
The Rule prohibits sellers and telemarketers from making false or misleading statements to induce anyone to pay for goods or services or make a charitable contribution. For example:
you cannot falsely claim that you need a consumer’s bank account number or credit card number only for identification purposes, when, in fact, you will use the number as payment for the goods or services offered.
..."
Note that if cancelling a negative option purchase requires calling a toll free number, then it must actually be possible to call that number and cancel.
"...
9. Negative Option Features
The Rule prohibits sellers and telemarketers from misrepresenting any material aspect of a negative option feature of an offer, including: the fact that the consumer’s account will be charged unless the consumer takes an affirmative action to avoid the charges, the dates the charges will be submitted for payment, and the specific steps the customer must take to avoid the charges. For example, the Rule prohibits you from representing that to avoid being charged, the consumer need only call a tollfree number to cancel if, in fact, the number is never answered. In this case, you would be misrepresenting the specific steps the customer must take to avoid the charge, because the steps described wouldn’t achieve that purpose.
..."
"...
Payment Methods Other than Debit and Credit Cards
The Rule requires “express verifiable authorization” when the payment is made by a method other than a credit card (subject to the Truth in Lending Act and Regulation Z), or a debit card (subject to the Electronic Fund Transfer Act and Regulation E). Because many novel payment methods lack protection against unauthorized charges and dispute resolution rights should the customer be unhappy with the goods or services, the Rule requires that when customers in telemarketing transactions pay by such methods, sellers and telemarketers must meet a higher standard for proving authorization. This provision, the prohibition on sharing unencrypted account numbers, and the requirement that a consumer’s express informed consent be obtained in every telemarketing transaction, are in place to protect consumers from unauthorized charges.
...
Who is responsible for obtaining verifiable authorization? Under the Rule, sellers and telemarketers that receive payment by methods other than credit or debit cards are responsible for obtaining verifiable authorization in those transactions. Even if you use the services of a third party to process or submit billing information other than credit or debit card information, you are responsible for ensuring that the disclosure requirements of the Rule for verifying authorization are met. Under the Rule, a third party also can be held liable for violating the Rule if the third party substantially assists a seller or telemarketer and knows — or consciously avoids knowing — that the seller or telemarketer is violating the Rule by failing to obtain verifiable authorization.
Processing and submitting account information constitutes substantial assistance to a seller or telemarketer. Therefore, if a third party is processing account information for a seller or telemarketer, the third party should ensure that whoever is obtaining consumers’ account information obtains verifiable authorization in accordance with the Rule’s requirements. A third party who processes and submits bank account information cannot avoid liability by not asking questions about whether authorization procedures comply with the Rule. Indeed, a third party can be held liable under the Rule if it knows that the authorization procedures do not comply with the Rule and it processes or submits account information for payment anyway.
...
Oral Authorization
Any audio recording of an oral authorization 3 for payment must clearly demonstrate that the consumer has received each of seven specific pieces of information about the transaction and that the consumer has authorized that funds be taken from (or charged to) his or her account based on the required disclosures by the seller or telemarketer. A general question like, “Do you understand all the terms of the sale?” followed by a consumer’s “uh-huh” or “yeah” is not enough to demonstrate authorization. The tape recording must show that the consumer received each piece of information below and that, based on this information, the consumer understood and acknowledged each term of the transaction and authorized the transaction.
A consumer must be told and must acknowledge:
the number of debits, charges, or payments (if more than one).
the date the debits, charges, or payments will be submitted for payment.
the amount of the debits, charges, or payments.
the customer or donor’s name.
the customer or donor’s billing information, identified in specific enough terms that the consumer understands which account will be used to collect payment for the transaction.
a telephone number that is answered during normal business hours by someone who can answer the consumer’s questions.
the date of the consumer’s oral authorization.
..."
Note that if BofA is processing Chartered's payments, and they assist them in making unauthorized charges, either knowingly or by avoiding knowing, then they are also liable for violation of TSR.
"...
Authorization by Written Confirmation
If sellers and telemarketers choose verifiable authorization through written confirmation, they must send the confirmation to the consumer via first class mail — and identify it clearly and conspicuously as confirmation of payment — before submitting the consumer’s billing information for payment. That does not mean that you must wait to submit this information until a consumer receives the confirmation: The Rule requires only that you send it before you submit the billing information for payment.
The Rule leaves it to sellers and telemarketers to determine what procedures are necessary to ensure that confirmations are sent prior to submission, to put these procedures in place, and to ensure that records are generated and maintained to document that confirmations are sent at the appropriate time and required refunds are provided.
The written confirmation must contain all the information required in a tape recorded authorization. In addition, if you choose to use the written confirmation method of authorization, you must have a refund policy in place and must disclose in the written confirmation how to obtain a refund if the consumer disputes the written confirmation. The Rule’s prohibition on misrepresenting a refund policy applies in the context of obtaining verifiable authorization by means of written confirmation. Note: In transactions involving pre-acquired account information combined with a free-to-pay conversion, sellers and telemarketers may not use the written confirmation method of obtaining authorization. In these transactions, written confirmation does not constitute “express verifiable authorization.”
..."
BINGO! Written confirmation method is NOT allowed for transactions involving pre-acquired account information combined with free-to-pay conversion, as it does NOT constitute "express verifieable authorization".
Chartered is reported to sign up consumers using pre-aquired account information, while claiming they were just sending "information". When consumers later dispute the charges, Chartered then claims they had sent the information and confirmation on the policy that they are claiming consumers had agreed to be charged for.
Since the transactions involve pre-acquired account information (from BofA), combined with "free-to-pay conversion", written confirmation of authorization is NOT allowed by TSR.
"...
When pre-acquired account information is used and the offer includes a free-to-pay conversion feature, telemarketers must:
obtain from the customer at least the last four digits of the account number to be charged.
obtain the customer’s express agreement to be charged for the goods or services and to be charged using the account number for which the customer has provided at least the last four digits.
make and maintain an audio recording of the entire telemarketing transaction.
Obtaining the last four digits from the customer: To meet the requirement that sellers and telemarketers “obtain from the customer” at least the last four digits of the account number to be charged, you must ask the customer to provide this information, and the customer must provide it to demonstrate an understanding that by doing so, he or she is agreeing to make a purchase. You must inform the customer that you have the customer’s account number or the ability to charge the account without getting the full account number from the consumer. Reading the information to the customer and asking for confirmation of the digits is not complying with the Rule. Neither is it sufficient to read the digits to the customer, and then ask the customer to recite them back. In addition, it is not adequate to reuse digits that a customer may have provided for identification purposes during another portion of the call — such as in an inbound call where you ask the customer to provide his or her account number by pressing digits on the telephone keypad.
..."
Note that at least the last 4 digits of the consumer's account number MUST be provided by the CONSUMER, and that it is not enough to use some confirmation of the account number in a different part of the call to meet this requirement for authorization. The numbers must be provided by the consumer specifically as part of the authorization part of the call, AFTER the terms have been disclosed, and all of that MUST BE RECORDED.
"...
This is not to be interpreted as mandating that a seller or telemarketer have the unencrypted last four digits of a customer’s account number to compare the digits the customer provided to the actual account number. Rather, the agencies that issued rules under the Gramm-Leach-Bliley Act caution financial institutions against sharing the unencrypted last four digits of a customer’s account with a telemarketer, even to ensure that the customer has provided these digits accurately in giving express informed consent.
..."
Note warning by GLB enforcement agencies regarding disclosing last 4 digits to telemarketers.
"...
Audio Recording of the Transaction: In a transaction where sellers and telemarketers have pre-acquired account information and are offering goods or services on a free-to-pay conversion basis, the entire telemarketing transaction must be recorded on audio. The audio recording must capture the material terms provided to the consumer, as well as the context and manner in which the offer is presented, because this can be critical to demonstrate that a consumer’s consent is both express and informed. In a single-transaction call, this means taping the entire call; in a multi-purpose call it means recording the entirety of each transaction using pre-acquired account information coupled with a free-to-pay conversion offer.
In a situation where telemarketers are bound by state law to obtain consent to record the transaction, they may ask permission to tape before beginning to record; this is the only portion of the call that may be conducted without recording. If it is necessary to explain the purpose of the call or to identify the seller to obtain the customer’s permission to record, telemarketers must reiterate this information once the recording begins to demonstrate that the required prompt disclosures were made in the outbound call.
..."
Note that to obtain authorization in the case of pre-acquired account information, essentially the whole call must be recorded, to capture not only the terms and authorization along with account number provided by the consumer, but the context of the call.
TSR REQUIRES RECORDING OF THE WHOLE CALL RELATED TO THE TRANSACTION, OR ELSE THE AUTHORIZATION DOES NOT MEET THE TSR'S REQUIREMENTS.
2) Violation of TSR, for billing without authorization. Invalid authorization of an alleged transaction involving pre-acquired account information and "free-to-pay" conversion, due to a) consumer not providing last 4 digits and b) using mailed confirmation as "authorization".
http://fl1.findlaw.com/news.findlaw.com/wp/docs/ftc/donotcall92303ord.pdf
Disputes of paper checks or their Check 21 equivalents, (i.e. due to forgery, etc.) would be under FRB Reg. CC.
Disputes of unauthorized credit card charges are under FCBA.
All have specific provisions requiring that banks investigate consumer disputes filed within 60 days of the statement date showing the disputed charge.
BofA is reported to claim that they will only go back 60 days on refunding unauthorized charges (presumably under FRB Reg. E). But since BofA and Smart Step have a marketing agreement by which BofA is selling customer account information to Smart Step, and if that agreement is similar to other Intersections agreements, such as the Discover contract above, then it probably contains a similar provision:
"...
15. Fraud Prevention. INTERSECTIONS agrees to take all actions necessary to prevent fraud in connection with the Product and Services provided hereunder including, but not limited to, misuse of credit bureau information, Cardmember information and/or account numbers by its employees. INTERSECTIONS agrees to be held strictly liable for any fraud committed or facilitated by its employees. INTERSECTIONS shall immediately inform DFS of any evidence of fraud by Cardmembers it may become aware of and shall cooperate with DFS in resolving such matters.
..."
Hence, BofA's "loss" if they refunded more than 60 days of charges to their customers IS NOT REALLY BofA's LOSS, as they have a remedy allowing reversal of unauthorized charges disputed due to fraud going back more than 60 days.
Their contract, assuming it is similar to the above, would allow reversing and refunding ALL amounts charged due to fraud by Intersections employees, and obtaining those funds back from Intersections, NOT LIMITED BY the 60 DAY FRB Reg. E dispute limit, since Intersections is "strictly liable" to BofA for such fraud.
This may undermine BofA's position that they can't refund more than 60 days of charges. It also suggests that unauthorized charges should be specifically disputed as FRAUD, basing the lack of "authorization" on the FTC TSR "pre-acquired account information with free-to-pay conversion" requirements for full call recording, verifiable authorization, consumer providing at least last 4 digits of account, etc. Any recording produced which fails to meet the full TSR requirements is itself evidence of fraud.
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx ... 6.0.3.6&idno=12
"...
(5) Notice to financial institution. (i) Notice to a financial institution is given when a consumer takes steps reasonably necessary to provide the institution with the pertinent information, whether or not a particular employee or agent of the institution actually receives the information.
(ii) The consumer may notify the institution in person, by telephone, or in writing.
(iii) Written notice is considered given at the time the consumer mails the notice or delivers it for transmission to the institution by any other usual means. Notice may be considered constructively given when the institution becomes aware of circumstances leading to the reasonable belief that an unauthorized transfer to or from the consumer's account has been or may be made.
..."
BofA is often failing to properly respond to reports of unauthorized transactions from Smart Step. Despite their attempts to divert consumers from bank disputes to contacting Smart Step directly, reporting of unauthorized charges to BofA IS "constructive notice" to BofA, reguardless of whether they treat it as a report of fraud, reguardless of whether notice is by phone, mail, or other normal means, and even regardless of whether BofA receives notice by mail, as long as such notice from the consumer IS MAILED. Sending notice certified establishes the date of notice for purposes of Reg. E disputes regardless of whether BofA acknowledges receipt, and regardless of whether BofA actually receives the letter at all. Notice under Reg. E is defined baed on establishing when notice was given by the consumer to establish limits of liability to the consumer, and not dependent on whether the bank can even act, or does act, on such notice. Similar to rules for liability due to defective, altered or forged checks.
"...Notice may be considered constructively given when the institution becomes aware of circumstances leading to the reasonable belief that an unauthorized transfer to or from the consumer's account has been or may be made. ..."
You see the charge, you dispute (call, write, whatever), that sets the date of notice. There is no "not good enough dispute" by the consumer or "disputed in the wrong way", since notice is given based only on whether the bank "becomes aware of circumstances leading to the reasonable belief that an unauthorized transfer to or from the consumer's account". Bank doesn't even actually have to become aware; moment of mailing is "constructive notice", even if a hurricane wiped out the town after you put your letter in the mailbox. Same as for their statements: statement date begins the 60 days to dispute, assuming they mail it, whether or not you ever receive it.
The bank only needs to become aware of the circumstances, or be "notified" of those circumstances, that should lead to such a "reasonable belief" that such a transfer has or will occur. It matters not that they actually reach that reasonable belief, and in fact being so screwed up that they refuse to be aware of threats to their customers' money does not allow them to fail to release their customer from liability for timely disputed charges as required by Reg. E.
8 2009 (to date)
10 2008
2 2007
Follow-up to original complaint in Jan. 2009. Consumer filed complaint with Illinois Department of Insurance. Note that with his original complaint to Smart Step, they attempted to delay him by an additional 45 days, which might have undermined his Reg. E dispute rights if he had not documented his dispute already with BofA. Also note their claim to have sent the "policy" in the mail, and as in many similar complaints, no such "policy" was ever received.
Also note BofA's handling of his dispute. It appears they are actively trying to discourage such disputes.
Allegedly his wife authorized it, according to Smart Step, but her name was not on the account. Yet they still allowed that "authorization", if it even happened, knowing she was not on the account. Smart Step/Intersections never did produce the CD audio recording of the alleged "authorization" they said they would, only what they claim was a written copy.
The whole reason for FTC's TSR requiring recording of the WHOLE CALL, INCLUDING TELEMARKETER'S REPRESENTATIONS, AND THE DISCLOSURE OF TERMS BEFORE ASKING FOR AUTHORIZATION, with recording of the consumer providing a VERIFIABLE AUTHORIZATION including providing at least FOUR DIGITS OF THE ACCOUNT NUMBER, is to prevent this type of telemarketing fraud based on pre-acquired account information.
The only reason to provide a WRITTEN "copy" of the alleged call, instead of the actual recording, is that either there IS NO RECORDING, or the RECORDING WOULD DOCUMENT THAT THE AUTHORIZATION DID NOT MEET LEGAL REQUIREMENTS. If an alleged written copy of the call could be produced, then so could the actual recording from which it was made, since someone would have to listen to it to produce what they claim is a written copy. If the written copy meets TSR regs, and if it were a true and accurate transcript, then there is no reason not to have provided the recording itself.
All that the written alleged "transcript" does is attempt to deflect further trouble from this consumer, to "bluff" him into believing that further complaints will be pointless since the company claims to have a recording. This is the same purpose served by claiming to have a recording but never producing it, as reported in other complaints.
But we already know that the "authorization" was invalid on it's face, since even Smart Step claims it was supposedly authorized by his wife, who is not on the account. If it was even "authorized" by the wife, they would have known at the time of the call that the wife was not on the account, since they would have had the account information they were using to do the telemarketing.
Best guess: It is all bluff. Wife only "authorized" sending "information", which they also tried to claim confirmed the "authorization", even though nothing arrived. Since it was clear that any recording could show no actual legally valid authorization, they sent a fake transcript to create the appearance that the call and authorization met legal requirements, and then caved 8 months later due to Illinios Department of Insurance complaint. At this point it is unlikely that they will produce any recording, as it will probably not agree with the transcript. BofA dispute was ignored, if not actively discouraged, and BofA did NOT reverse any charge.
http://www.ripoffreport.com/Insurance-Companies/Smart-Step-Insurance/smart-step-insurance-intersec-db2w9.htm
"...
The number of cancellations within the first 90 days as a percentage of new subscribers was 29.3% in 2005, 24.5% in 2006 and 25.2% in 2007. The number of cancellations within the first 90 days of subscription, as a percentage of new subscribers was higher during the year ended December 31, 2007 compared to the same period last year. We analyze subscriber cancellations during the first 90 days because we believe this time period affords the subscriber the opportunity to evaluate the service. The number of cancellations after the first 90 days, which are measured as a percentage of the number of subscribers at the beginning of the year plus new subscribers during the year less cancellations within the first 90 days, was 25.6% in 2005, 27.7% in 2006 and 31.6% in 2007. The total number of cancellations during the year as a percentage of the beginning of the year subscribers plus new subscriber additions, was 36.5% in 2005 and 2006 and 39.7% in 2007. Conversely, our retention rates, calculated by taking subscribers at the end of the year divided by subscribers at the beginning of the year plus additions for the year, decreased from 63.5% in 2005 and 2006 to 60.3% in 2007. The retention rate decreased in 2007 primarily due to a significant increase in the rate of credit card declines in the fourth quarter of 2006 at one of our clients due to changes to the manner in which the client administers third-party products. We cancelled service to these affected subscribers in 2007, which had an impact on our retention rate for the year ended December 31, 2007.
...
Revenue Recognition
We recognize revenue on 1) identity theft, credit management and background services, 2) accidental death insurance and other membership products and
3) other monthly subscription products.
Our products and services are offered to consumers principally on a monthly subscription basis. Subscription fees are generally billed directly to the subscriber's credit card, mortgage bill or demand deposit accounts. The prices to subscribers of various configurations of our products and services range generally from $4.99 to $25.00 per month. As a means of allowing customers to become familiar with our services, we sometimes offer free trial or guaranteed refund periods.
...
Accidental Death Insurance and other Membership Products
We recognize revenue from our services in accordance with SAB No. 101, as amended by SAB No. 104. Consistent with the requirements of SAB No.'s 101 and 104, revenue is recognized when: a) persuasive evidence of arrangement exists as we maintain paper and electronic confirmations with individual purchases,
b) delivery has occurred at the completion of a product trial period, c) the seller's price to the buyer is fixed as the price of the product is agreed to by the customer as a condition of the sales transaction which established the sales arrangement, and d) collectibility is reasonably assured as evidenced by our collection of revenue through the monthly mortgage payments of our customers or through checking account debits to our customers' accounts. Revenues from insurance contracts are recognized when earned. Marketing of our insurance products generally involves a trial period during which time the product is made available at no cost to the customer. No revenues are recognized until applicable trial periods are completed.
The amount of revenue recorded by us is determined in accordance with FASB's EITF 99-19. For insurance products we generally record revenue on a net basis as we perform as an agent or broker for the insurance products without assuming the risks of ownership of the insurance products. For membership products, we generally record revenue on a gross basis as we serve as the primary obligor in the transactions, have latitude in establishing price and bear credit risk for the amount billed to the subscriber.
..."
60% retention rates?
Be aware that if you are dealing with BofA, there are many reports from consumers that BofA attempts to block their customers' attempts to dispute fraudulent charges from Smart Step, since BofA sells their customer account data to Smart Step, and gets a cut of any sales.
Also be aware that Smart Step has been reported to claim it has "recorded authorizations", but there are reports that they may not be able or choose not to produce such recordings when demanded, that some consumers report receiving recordings that may have been doctored, or that they may not meet FTC's TSR "verifiable authorization" requirements for telemarketing involving "pre-acquired account information" or involving "negative option" "free-to-pay" conversion. To understand the exact meaning of those terms, should they BS you about agreeing to something you never agreed to, call the FTC.
Be prepared to take the next step, as being able to prove timely notification to your bank that charges are disputed is critical to obtaining full refunds.
If your bank does not agree immediately to refund the charges, or suggests that you have to deal with Smart Step, send a WRITTEN DISPUTE to your bank's dispute address from your statement. In your letter indicate that you did not authorize the charges, that they are fraudulent, the date you originally contacted your bank (by phone, in person, etc.) to notify them of the charges, and that you are requesting that they be reversed due to fraud.
Send your letter certified, return receipt requested, noting the certified number on the bottom of your letter, and keeping a copy for your files with the certified receipt, so that you have proof of when you sent it, and so you can get a green card or confirmation from the Post Office website of when your bank received it. Timely notification (within 60 days of the statement date of the statement showing disputed charges) establishes your bank's obligation to investigate disputed charges under FRB Reg. E (for checking account EFT or debit cards) or FCBA (for credit cards).
If your bank fails to return your money in response to your fraud dispute, contact the Office of the Comptroller of the Currency, responsible for regulating national banks. Go to their website, www.occ.gov , where you will find how to file a dispute with them. Mail in a copy of your written bank dispute and delivery confirmation as part of your complaint to substantiate the timely notification of your bank under FRB Reg. E.
http://www.drted.com/Citibank%20credit%20protector%20scam.html
Note the transcript of the CD of the "authorization" provided by Citibank in response to a dispute leading to a small claims case.
Note the claim by the telemarketer that the 30 day "free" period does not start until the customer receives the material on the plan, note that no material was ever received, although Citi later produced what they claim to have sent.
When telemarketing involves "pre-acquired account information", as in this case:
1) use of mailed confirmation is not valid under FTC TSR,
2) recording must be entire call, including all representations made, the terms of the offer, and the complete consumer authorization
3) recorded authorization must include consumer reciting last 4 digits of the account number.
Note that critical parts of the recording are covered up with static, specifically including questions by the customer, and specifically including the last 4 digits of the account number. The seller claims the consumer is being asked to repeat the 4 digits, but "static" just happens to hide what was actually said.
In his small claims suit, consumer claims he was led to believe that he had to sign and return documents before the account would be activated.
He also claims he never received any documents, let alone the offered $15 gas coupon. The transcript includes several representations by the telemarketer that the 30 day free trial would not start until he received the information on the "plan", consistent with requiring an active response on receiving the material to activate the charges.
For example, this is pretty clear:
"OPER: Before the thirty days are up and like I said before the thirty days does not start until after you received the membership materials in the mail and you’re not going to receive the materials until 1-2 weeks."
The questions that were not covered by static indicate that he was asking about that exact issue. One question covered by static specifically refers to "information". His replies that just repeat back what OPER had said amazingly come through without static.
Transcript is consistent with other reports of bank-affiliated telemarketing fraud involving "pre-acquired account information", with intentional mixing of the terms of the offer "won't start until you receive the information" mixed with "free for 30 days". Deliberate confusion between the "sales pitch" and the statement of terms of the offer, with various parts of the terms mixed in before, during authorization, and after.
Static conveniently covers critical parts of the consumer's side of the conversation which might contain questions indicating the consumer did not understand the terms due to the mixed representations. The static never covers up the seller, and appears to never cover the consumer when responding in agreement with the offer.
Static does cover the very account recitation required by FTC to produce a "verifiable authorization". How do we know this was part of the original call, rather than just a script having been read around the original recording and mixed with the consumer's responses where possible? We just "infer" that it happened from what the telemarketer says, and assume the consumer must have said something consistent.
Appearance of static specifically in key parts of the recording may indicate that the recording has been carefully doctored. Citibank's delays in producing the recording are also consistent with an attempt to originally deny access to the recording.
It would appear that "static" is a better tactic that editing and inserting repeated copies of the same word "yes" as has been reported in a consumer complaint against Smart Step, since it may be harder to pick out the boundaries of the edit and the doctoring may be harder to prove than when editing in the consumer's own voice.
2005 is after FTC's release of the "pre-acquired account information" authorization requirements to the TSR, and also after the legal challenges to it by bank affiliated telemarketers resulted in a win by FTC, so the current regulations applied at the time.
1) Attempt to create the appearance of authorization by claiming to have mailed confirmation, invalid under TSR.
2) Misrepresentation of the start of the charges as 30 days from receipt of the information.
3) Misrepresentation by implying that consumer would have to actively respond to mailed information to activate charges.
4) Use of teaser coupon to try to make the sale.
5) No information sent.
6) No coupon sent.
7) Misrepresentation by mixing conflicting offer terms.
8) Possible failure to obtain authorization by recorded consumer spoken account number. We have only static, which may also be consisten with doctored recording.
All of the above factors are common to other complaints of telemarketing fraud using "pre-acquired account information".
The FTC's TSR requirements on what to record when telemarketing with pre-acquired account information" have prevented nothing.
Slick.
"...
Dr. Ted: So is it necessary that I cancel otherwise if I don’t than I’m going to get a bill right…Is it a must-cancel by thirty days?
OPER: Before the thirty days are up and like I said before the thirty days does not start until after you received the membership materials in the mail and you’re not going to receive the materials until 1-2 weeks.
..."
http://www.ago.state.co.us/press_detail.cfmpressID=397.html
"...
In particular, the attorneys general were concerned about the alleged deceptive sales practices of Citibank's contract vendors which often resulted in Citibank customers being unfairly charged for products and services such as discount buying, roadside assistance, credit card loss protection, and dental plans which they had not agreed to purchase. The attorneys general alleged that the bank's telemarketing contract vendors solicited customers largely through solicitations which relied upon "free trial offers" which failed to adequately disclose that it was the responsibility of the customer to cancel during the trial period. Since Citibank consumers were not asked to provide their credit card information directly to the telemarketing vendor, many customers did not understand they would be charged continuously once the free trial period expired absent taking steps to affirmatively cancel.
Without admitting any wrongdoing, Citibank has agreed to a settlement, which requires it to include sweeping new consumer protection provisions in its contracts with outside telemarketing firms. These reforms will:
Prohibit deceptive solicitations by its vendors
Require the bank to review and approve all vendor scripts and marketing materials
Require the bank's telemarketing firms to comply with all applicable consumer protection laws
Prohibit customer charges for any products or services unless there is express authorization given by the account holder
Require clear and conspicuous directions for customers to cancel the purchases at any time, including providing a toll-free telephone number to cancel purchases
Citibank has agreed to pay $1.6 million to the investigating states to settle the case, including $40,000 to the State of Colorado to be used for attorney fees, investigative costs, and for other consumer protection purposes.
..."