HARRISBURG — Attorney General Tom Corbett announced the filing of a consumer protection lawsuit against an Erie man and his business who are accused of deceiving consumers about “guaranteed” credit card offers that would supposedly help people who have poor credit.
Corbett said the civil lawsuit was filed by the Attorney General’s Bureau of Consumer Protection against Richard E. Wood, doing business as New Card Services, 4237 Buffalo Road, Suite #301, Erie.
Corbett said that Wood and his company allegedly placed advertisements in newspapers across Pennsylvania offering a Visa or MasterCard with a $7,500 credit limit — adding that approval was “guaranteed” and bad credit was “okay.”
“Consumers were drawn to this business by claims of guaranteed access to credit cards even if they had past or current credit problems, paying anywhere from $60 to $110 in application fees,” Corbett said. “Instead of getting new credit cards, the only thing consumers received was a list of banks and businesses that offer credit cards – information they could have gotten themselves, for free.”
According to the lawsuit, consumers who called the toll-free number listed in the New Card Services advertisements were told that they were ‘absolutely guaranteed’ to be approved for a credit card and past or present credit issues would not be a problem. Those who requested an order form were notified that they would be required to pay fees ranging from $49.95 to $89.95, along with $10 to $30 for processing and handling.
Corbett said the application form includes a money-back guarantee that promised consumers they would receive an immediate refund if they failed to be approved for the credit card they were seeking.
According to the lawsuit, consumers who sent order forms to New Card Services did not receive credit cards, but instead were sent a list of banks and businesses that issue cards. Additionally, consumers were told that no refunds would be issued unless they were rejected by all of the companies on the list and that refund requests had to be submitted within 30 days – a process that gave consumers little chance of qualifying for their “immediate refund.”
“It is extremely important for consumers to be cautious about deals that are ‘too good to be true,’ especially in situations where businesses are offering to help with credit-related problems,” Corbett said. “Consumers should also carefully research any offer that involves paying up-front fees in order to apply for credit cards, loans or other financial services, because in many situations they can obtain free applications directly from banks and financial businesses.”
Corbett added that anyone who believes they have been targeted by deceptive ads or unfair sales should contact the Attorney General’s Consumer Protection Hotline at 1-800-441-2555, or file an online complaint form online (Click on the “Complaints” button in the main website menu and select “Consumer Complaint Form).
Corbett said that Wood and his business are accused of violating Pennsylvania’s Consumer Protection Law and Credit Services Act, along with failing to provide required financial disclosure information related to credit services, not informing consumers of their five-day right to cancel a credit services contract and failing to register a fictitious business name with the Pennsylvania Department of State.
The lawsuit seeks full restitution for all consumers along with fines and penalties of up to $1,000 for each violation (up to $3,000 for each over 60-years old).
The lawsuit was filed in Erie County Court of Common Pleas by Senior Deputy Attorney General Darrel J. Vandeveld of the Attorney General’s Bureau of Consumer Protection.