Telemarketers Promise To Lower Your Debt, But Be Careful

The numbers are staggering: Americans currently owe $963 billion of credit card debt and a Tacoma company claims it wants to help you reduce yours -- but if this company cold-calls you, you might just want to hang up the phone.

Traci Pugh wishes she had. She says her problems started with one of its telemarketers, "I got a phone call on my cell phone and they said they were my credit card company."

Greg Culkins of Lacey says his mother in Seattle received a similar call, "He led her to believe that he was a representative of her bank."

They said the telemarketers offered to lower their credit card interest rates and reduce their debt.

Pugh, who lives in Arizona, gave the caller both her and her husband's credit card numbers. She says once the telemarketer had that information his tone changed.

"First thing out of his mouth was, 'Yeah, oh, we don't negotiate with them and we don't negotiate with your husband's credit card either. So the best thing for you to do is to get away from your credit card company because they're basically terrorists.' That is what I paid almost $900 for?" Pugh said.

That phone call along with a packet of financial information she later received in the mail cost Pugh $890.

Culkins says his mother tried to decline, "She said, ‘Well, I just can't do this, you know?’"

CLANCY: “So she said no?”

"Oh yeah, yeah. And he wouldn't take no for an answer obviously," Culkins said.

Culkins says his mother's credit card was billed $490, "It was a charge that certainly she had not authorized."

Culkins was able to get his mother's money back by disputing the charge with her credit card company. Pugh, too, received a full-refund after an on-camera interview.

Still, both filed complaints with the Washington State Attorney General's office against the company, Mutual Consolidated Savings in Tacoma, in part because they say the caller led them to believe they were talking with someone from their own bank -- which is against the law, according to the Federal Trade Commission.

"The problem with these companies is they often cross the line to entice consumers to sign up with them by making representations that are simply false. For example, they will claim they are in fact the consumer's credit card company or are affiliated with the consumer's credit card company. Both those claims are false," said Chuck Harwood from the Federal Trade Commission.

Pugh and Culkins aren't the only ones who have concerns about Mutual Consolidated Savings. The state attorney general’s office has received 17 complaints in the past three years.

When you Google Mutual Consolidated Savings' phone numbers, dozens of blogged complaints appear online.

Niki Horace with the Better Business Bureau says in the past three years the BBB has received 86 complaints against Mutual Consolidated Savings.

"There's a pattern of complaints, people are complaining," Horace said.

KIRO 7 Consumer Investigators wanted to ask Mutual Consolidated Savings about these allegations, so we went to the Tacoma address listed on the company's website.

"We're from Channel 7."

The company had nothing to say that day.

Weeks later, however, its Chief Compliance Officer did agree to an interview and identified himself as “Christopher Trescothick.”

Trescothick claims Mutual Consolidated Savings is a legitimate business that helps consumers out of debt. That Mutual Consolidated Savings has thousands of happy customers, although when asked to provide the names and numbers of some, Trecothick instead referred KIRO 7 to testimonies on the company's website.

He also claims that employees who mislead consumers, as Pugh and Culkins claim, are fired.

CLANCY: "Do you ever call claiming to be with credit card companies?"

"Absolutely not," Trescothick said.

In fact, Trescothick says Mutual Consolidated Savings is always honest with clients.

When asked, "Do you ever lie to them?"

"No, there's absolutely no reason to lie to clients. That's almost one of those questions that's just preposterous in nature," Trescothick said.

But KIRO 7 caught "Trescothick" in a lie that both the Washington State Attorney General and the Better Business Bureau call, if not illegal, a serious red flag for consumers.

CLANCY: "There is no Chris Trescothick licensed with the state of Washington. That's not your name."

TRESCOTHICK: "That is what I refer to as a nom de business."

CLANCY: "Why do you need a nom de business if you're not lying to your customers? Why would your consumers trust you with their account information if you can't even use your real name?"

TRESCOTHICK: "This is a very personal question. That's a very good question. My real name is also Christopher."

CLANCY: "No, it's not."

TRESCOTHICK: "That is my first name."

CLANCY: "It's Kevin Hulbert."

TRESCOTHICK: “Absolutely.”

CLANCY: "Kevin Hulbert is your real name."

TRESCOTHICK: "Kevin Christopher Hulbert."

Hulbert claims he uses a pseudonym for safety reasons because Mutual Consolidated Savings uses telemarketing and as Chief Compliance officer it can make him a target.

A current Mutual Consolidated Savings employee, who wants to remain anonymous for fear of being fired, tells KIRO 7 Consumer Investigators that many managers at Mutual Consolidated Savings use multiple names.

"It's got to be because there's things being done that shouldn't be done, so they don't want themselves identified," said an anonymous Mutual Consolidated Savings employee.

The BBB says telemarketers who make the calls often use pseudonyms, but that company officials to whom consumers turn for recourse, like the Chief Compliance Officer, should not.

"If the principals of a company cannot give their official names, then how can you trust them?" Horace said.

The state's ranking consumer advocate agrees.

"The Consumer Protection Act of Washington prohibits unfair and deceptive practices, so we would look to see whether or not using pseudonyms rose to the level of deception, and therefore would be a violation of the consumer protection act," said Rob McKenna, Washington State Attorney General.

The attorney general and the BBB said never give your credit card number to anyone who calls.

Instead, if you're interested in the service being sold, get the caller's name, business name and number -- then go online and do your research.

On the BBB's Web site you'd learn that MCS currently has a C-minus rating, not high enough to be accredited.

Horace said in her opinion, it’s not high enough to be trusted with your banking information.

Both the attorney general and the Better Business Bureau say consumers don't need to pay anyone to lower their interest rates. That's something consumers can try to do on their own with one free phone call to their bank or credit card company.