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$2 Million FTC Judgment
Against Capital Card Services

WASHINGTON, July 25, 2001 -- Unscrupulous telemarketers continue to peddle worthless credit card loss "protection," and the Federal Trade Commission continues to work to stop them from doing so. In the latest action, the Commission has filed a stipulated final order for permanent injunction against Phoenix-based Capital Card Services, Inc. (CCS) and its president Cory M. Harris.

The order includes a $2 million judgment against Harris and the company, although the FTC said neither had significant assets. The order requires Harris to pay the amount that he does have in a bank account - $4,790.

Also under the order, the defendants will be prohibited from offering such "loss protection services" in the future and must post a $200,000 bond before engaging in any future telemarketing activities.

According to the FTC's complaint, CCS and Harris violated the FTC Act by:

1. claiming to be calling consumers from, or on the behalf of, their credit card issuers;
2. claiming that consumers could be held fully liable for all unauthorized charges made to their credit card accounts; and
3. falsely representing that the consumers had authorized the purchases for which they were charged.

In addition, by making false statements to induce consumers to pay for goods and services in connection with the telemarketing of their credit card loss "protection" programs, the FTC alleged the defendants violated the FTC's Telemarketing Sales Rule (TSR). In general, it is illegal to represent that any consumer is liable for unauthorized charges on his credit card in excess of the $50 limit set forth by federal regulations.

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