AOH :: CARDSCAM.TXT|
"Gold" and "Platinum" card scams
Facts for Consumers from the Federal Trade Commission
Gold and Platinum Cards -- July 1994
If you're looking for credit, be wary of some `gold' or
`platinum' card offers promising to get you credit cards or
improve your credit rating.
While sounding like general-purpose credit cards, some 'gold' or
'platinum' cards only permit you to buy merchandise from
specialized catalogues. Marketers of these credit cards often
promise that by participating in their credit programs, you will
be able to get major credit cards (such as an unsecured Visa or
MasterCard), lines of credit from national specialty and
department stores, better credit reports, and other financial
Rarely, however, can you improve your credit rating or obtain
major credit cards by purchasing 'gold' or 'platinum' credit
cards. Often the only major credit card you might obtain is a
secured credit card that requires you to make a substantial
security deposit with a bank. In addition, many of these
credit-card offerors do not report to credit bureaus, as they
promise, and their cards seldom help secure lines of credit with
Such 'gold' and 'platinum' credit-card offers are usually
promoted through television or newspaper advertisements, direct
mail, or telephone solicitations using automatic dialing machines
and recorded messages. People who live in lower-income areas are
often the target of these sales pitches.
What To Watch Out for
Be wary of 'gold' and 'platinum' card promotions that:
* Charge upfront fees, without saying there
may be additional costs.
Some 'gold' or 'platinum' credit-card promoters charge $50 or
more for their card. Only after you agree to pay this fee are you
told it costs extra, sometimes another $30 or more, to get the
merchandise catalogues. Yet, these catalogues are the only places
you can use these cards. Find out total costs before ordering
any such card.
* Use '900' or '976' telephone exchanges.
`Gold' and 'platinum' card advertisements may urge you to call
telephone numbers with '900' or '976' exchanges for information
about these cards. Remember: you pay for phone calls with these
prefixes _ even if you never get the 'gold' or 'platinum' card
offered. The cost of the call could be as high as $50 or more.
Before you call, be sure you know the total cost of the call.
* Misrepresent prices and payments for merchandise.
To purchase something from 'gold' or 'platinum' card catalogues,
you're not permitted to charge the total amount on your card.
Instead, you often must pay a cash deposit on each item you
charge an amount usually equal to what the company paid for the
product. Only after you pay your deposit can you charge the rest
of the cost, and prices in these specialty catalogues are usually
much higher than those at most discount stores.
* Promise to get you "better credit" easily.
`Gold' and 'platinum' card marketers like to promise that it's
easy to get major credit cards such as Visa or MasterCard after
using their cards for a few months. In fact, the only Visa or
MasterCard these marketers usually can get for you are secured.
That is, you first must deposit a sum of money in a bank account,
often $300 to $500, and the total you can charge on the credit
card is limited to that amount. (Secured credit cards are
available from banks, finance companies, and other credit card
issuers even to those who do not buy a 'gold' or 'platinum'
Some of these marketers promise to report your prompt payment for
merchandise in their catalogues to credit bureaus, in order to
boost your credit rating. In fact, many 'gold' or 'platinum'
card merchants do not report to credit bureaus. As a result,
using the card will not improve your credit rating.
How To Protect Yourself
To avoid being caught in a 'gold' or 'platinum' card scam, take
* Think twice about any offer to get "easy credit."
There are no "easy" solutions to a poor credit rating that is
based on accurate information. Be skeptical of any promises to
erase bad credit or to secure major credit cards regardless of
past credit problems _ whether they come from 'gold' or
'platinum' card offers, credit repair schemes, or similar plans.
* Before agreeing to any gold card offer, investigate it
You may want to contact your local Better Business Bureau,
consumer protection agency, or state Attorney General's office to
see if any complaints have been lodged against a particular
promoter of 'gold' or 'platinum' cards.
If a marketer promises you that a credit card is accepted at
particular retail chains, call those stores to make sure the
promise is true.
If a marketer assures you that credit bureaus will get reliable
credit information about you, call those bureaus to confirm that
the merchant is a member of the credit bureau. Unless 'gold' or
'platinum' card merchants are subscribers to credit bureaus, they
are unable to report information concerning your credit
* Be cautious about calling '900' or '976' telephone numbers.
Making phone calls with '900' or '976' prefixes will cost you. Do
not confuse these exchanges with toll-free '800' numbers where
the company pays for the call. If you mistakenly call one of
these numbers, contact your local phone company immediately. You
may be able to have the charge removed from your bill.
For More Information
If you want more information on your credit rights or on '900'
telephone numbers, contact the Federal Trade Commission (FTC) for
free single copies of the following publications:
Building a Better Credit Record
Fix Your Own Credit Problems
Solving Credit Problems
900 Numbers: New Rule Helps Consumers
Contact: FTC, Public Reference, Washington, DC 20580; (202)
326-2222. TDD (202) 326-2502. You also can request a copy of Best
Sellers, which lists all the FTC's consumer and business
If you have problems or questions about 'gold' or 'platinum'
cards, contact your local consumer protection agency or state
Attorney General's office. You also can contact the National
Fraud Information Center at 1-800-876-7060 (9:00 a.m. - 5:30
p.m., EST, Monday - Friday). NFIC will forward all appropriate
information to the FTC.
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