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According to the Better Business Bureau, a new scam is going around in which companies solicite and charge consumers for the service of negotiating a lower interest rate on their credit cards. Unfortunately, this charge can be as high as $1,500 and often nothing is even done to help the victim, leaving them with more debt and nowhere to turn.
One victim, according to a new Bankrate article, was charged $1,500 by a company called Easy Financial that contacted her at her home. They promised to reduce her APRs to between 4.99% and 6.99%, much lower than her current 12-14%. Her credit card was charged immediately and, although she was told she had one month to cancel, she was unable to get a refund after the company failed to lower her interest rate and instead transferred her entire balance to a new card.
The Better Business Bureau (BBB) has already received about 300 complaints about scams very similar to this. According to the BBB spokeswoman Alison Southwick, most of the people that have submitted complaints were contacted at their home by companies claiming to get them a lower interest rate on credit cards.
One of the biggest problems investigators are having is trying to track these callers, which often use tricks to display fake numbers on Caller IDs and claim to be “cardholder services.” They also usually hang up if questions are asked about their location.
According the the BBB, these scammers promise their victims savings of thousands in interest but charge a large upfront fee. The caller will ask for credit card information as well as the customer service number on the back of the card. A conference call is then placed with a representative with the card issuer and the caller will ask the representative for a lower rate.
Remember, these companies have no more power with your credit card company than you do. If you’re really interested in lowering the interest rates on your credit cards, call your card issuer yourself and try asking for a better rate. You should also realize that even if these companies do what they promise, you’re paying them hundreds of dollars for potential savings spread out over years. Save yourself the heartache and tackle the problem yourself.
If you find yourself receiving one of these calls, don’t give out your credit card or personal information. You can contact the Better Business Bureau, your state attorney general and the Federal Communications Commission to report the problem.
If you’re having trouble making your minimum payments, click here to read more about credit card hardship programs. You may also be interested to learn how to set priorities to pay back your credit card debt.