American Benefits Club, 1st Financial Solutions

Telemarketing Scheme Shut Down

November 26, 2001
A federal court has temporarily ordered a halt to an allegedly fraudulent scheme in which consumers paid up to $219.95 for a credit card which they never received.

The court has also frozen the defendants' assets and appointed a receiver to take control of the corporate defendants. More than 1,000 consumers have complained to consumer protection authorities about the defendants' scheme, which has likely caused millions of dollars of consumer injury, according to the Federal Trade Commission.

The FTC and the State of Illinois filed charges against 1st Financial Solutions, Inc., American Benefits Club, Inc., Rockwell Holdings, Inc., and John F. Boone. Other business names used by the defendants included "1st Freedom," "1st Choice Financial Solutions," and "Card Services." The companies are all based in the suburban Chicago area.

In addition, the FTC alleges, when the defendants' telemarketers were told by consumers that they did not wish to receive calls by or on behalf of the defendants, the telemarketers continued to call. The defendants continued their scheme even after the FBI executed a search warrant against Rockwell Holdings, Inc. on September 6, 2001, the Commission contends.

The complaint alleges the defendants used a network of telemarketers nationwide to offer VISA and MasterCard credit cards to consumers for fees ranging from $99.95 to $219.95. The defendants never provided credit cards or any other extension of credit, according to the complaint. Most of the time, consumers received nothing for their money. Some consumers received either promotional literature touting a membership benefits program, or an "ATTM" debit card - a "stored value card" -- that could only be used if the consumer deposited a sufficient amount of money into an account to cover the purchases.

The FTC and the State of Illinois are ultimately seeking a permanent injunction prohibiting the defendants from any further deceptive practices, as well as money for consumer redress.

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