Two More Advance-Fee
Credit Schemes Nabbed

WASHINGTON, Dec. 12, 2001 -- A husband and wife operating out of Connecticut have agreed to settle Federal Trade Commission charges that they deceived customers by promising, for a fee, guaranteed approval of major credit cards regardless of credit history.

Philip and Allyson Pestrichello, Credit Services of America, Inc. (CSA), and First Credit Alliance (FCA) promised consumers who responded to their ads that they were likely, for advance fees typically ranging from $45 to $105, to receive a MasterCard or Visa regardless of past credit history. The defendants also advertised that if consumers did not receive the promised credit card, they would get a refund.

In fact, the FTC alleged, consumers received neither credit cards nor refunds as promised.

The actiions were the latest under "Operation Advance Fee Loan 2000," an aggressive law enforcement sweep targeting corporations and individuals that falsely promise loans and credit cards for an advance fee.

According to the FTC's complaint filed in federal court in June 2000, CSA mailed brochures offering unsecured Visa and MasterCard credit cards to consumers who had bad or no credit. Consumers who received the brochures believed that by paying a processing fee, typically between $45 and $60, completing the application, and mailing it back to CSA, they would receive an unsecured credit card. The brochure also promised consumers guaranteed credit card approval or a refund of their processing fee.

Instead, the FTC alleged, consumers who sent in the completed CSA application and the required fee received photocopies of Visa or MasterCard applications from various banks or credit card companies. Consumers then had to apply to these entities for the credit cards. Consumers did not receive promised unsecured Visa or MasterCard credit cards from the defendants nor did they receive the promised refunds, the FTC alleged.

In addition, the FTC charged, after CSA ceased operations, Philip Pestrichello started First Credit Alliance, a nearly identical business. FCA offered consumers unsecured Visa credit cards, with credit limits up to $5,000, regardless of past credit history, and for an up-front fee typically ranging between $45 and $60. FCA sent many consumers a follow-up letter stating that they were "accepted for FCA's VISA placement program" and qualified for a $10,000 credit limit, for an additional $45 fee. As with CSA, the Commission alleged, consumers who applied to FCA did not receive the promised credit cards.

Under the terms of two separate settlements the defendants are prohibited from misrepresenting:

• that after paying a fee, consumers will receive a credit card or other extension of credit; that a consumer's processing fee will be refunded if they do not obtain the promised credit card;
• the nature or terms of their refund or cancellation policies;
• any fact material to a consumer's decision to pay a fee for any loan or extension of credit; and
• any other fact material to a consumer's decision to purchase any product or service.

Further, the settlements prohibit the defendants from using any aliases, pen names, or pseudonyms, or otherwise misrepresenting their true identities in the course of business dealings. The defendants also are prohibited from using or selling their customer lists.

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