Minnesota Cracks Down on Credit Scams

ST. PAUL, Minn. (CN) – The Minnesota attorney general says three “debt relief” companies are scamming consumers with bait and switch schemes. The state sued Priority Direct Marketing, Moneyworks, and Clear Financial Solutions in Ramsey County Court.

     Attorney General Lori Swanson says the scammers make cold calls promising to lower credit card interest rates for an upfront fee, and then “with money in hand” provide little or no services.
     Swanson says the companies promise to save their victims at least $2,500 in interest charges by negotiating lower rates on their credit cards. They promise a money-back guarantee and charge up-front fees of up to $1,599, Swanson says.
     Customers who sign up and pay up receive a welcome letter in the mail, often under a different company name – and that’s about all they get, the state claims.
     The letter is accompanied by an “optimized financial plan,” and a profile form asking for confidential information. Swanson says letters describe the defendants’ interest rate negotiation services as a “free bonus.”
     Some victims said the companies failed to renegotiate their debt, while others said the companies didn’t even try. The defendants refused to pay the promised refund, using a variety of excuses, or simply hung up on their victims, Swanson says.
     Clear Financial opened an American Express account for one 84-year old victim, who was confused during the phone call, Swanson says. Clear Financial told her she would be charged $95 for a credit report, but charged her $995, according to the complaint.
     Swanson says Clear Financial has even charged consumers who refused its services over the phone, and.
     Priority Direct operates out of Texas, Moneyworks out of Georgia, and Clear Financial out of Florida; none are registered in Minnesota, Swanson says.
     She seeks damages for consumer fraud, deceptive trade and credit violations.

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