Credit Card News
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Other » FTC Ends $275 Million Credit Card Scam

FTC Ends $275 Million Credit Card Scam

By
Add to Favorites:
FTC Ends $275 Million Credit Card Scam

The Federal Trade Commission (FTC) has won a federal court order to halt operations ofBadCustomer.com, a website that allegedly scammed $275 million from the accounts of approximately five million credit card holders and bank customers during the past four years.

The Scheme

According to the FTC, a company by the name of I Works, Inc lured customers into becoming members of the site. In return for their membership, which was supposed to be a “trial” membership, consumers would receive information on federal grants and products. It turned out, however, that these were bogus grants and products.

Forced Continuity

Even though it was supposed to be a trial membership, the scam turned out to be a forced continuity membership, which means that once the site received a consumer’s credit card information, the company continually charged the card month after month. When customers would complain or threaten to report the company to the FTC, the company in turn would threaten to report the consumers to the website BadCustomer.com.

BadCustomer.com

As it turns out, the same scam artists running I Works, Inc. also ran BadCustomer.com. Essentially, customers listed on BadCustomer.com were reported as those that do not pay their bills, or engage in a lot of requests for credit on items purchased. Being listed on the BadCustomer website could make it difficult for the consumer to make future online purchases.

According to FTC Chairman Jon Leibowitz, “No consumer should be sucker-punched into making payments for products they don’t know about and don’t want.”

When the victims were unable to cancel the monthly charges through I Works, they asked their credit card companies to investigate and provide a charge-back, which is a temporary credit until the problem is resolved. The charge-backs eventually led to the uncovering of the entire scheme. Foxbusiness.com reported that a total of 10 individuals, 10 corporations and 51 shell corporations were involved in the scam. One individual has already been jailed and the operations of all the involved companies have been shut down.

It is estimated that approximately 5 million consumers were victims of the scam. At least 500,000 went through the credit card dispute process with their credit card companies and demanded charge-backs.

Add to Favorites:

Related News:

Free Pizza on Papa John’s & VISA

By Dar Dowling, Posted: December 6, 2016

Eating pizza while watching a football game is a time-honored American tradition, so it’s not surprising that VISA, has teamed up with Papa John’s to give fans a little more this season. If fans use Visa Checkout they can take advantage of ... Continue reading
USAA Digital Wallet Gets an Upgrade

By Dar Dowling, Posted: December 5, 2016

USAA has upped the ante with their digital wallet, making it a bit more like an everyday wallet by adding in six additional features, so people can now include everything from their automobile information to insurance cards in their ... Continue reading
Global Fraud On Hackers To-Do List This Season

By Dar Dowling, Posted: December 2, 2016

With the holiday shopping season upon us, retailers around the world can expect a 12% bump in online fraud when compared with data from the holiday season last year. Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Get 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 12.24%-22.24% based upon your creditworthiness.
For Excellent/Good Credit
Earn 1% cash back on gas and grocery purchases. Terms apply.
For Fair Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit