December 31, 2002
Sean Caine, 410-576-6357
CURBS DECEPTIVE TELEMARKETING
APPEALS TO FIRST USA BANK CUSTOMERS
Requires Bank to Monitor Promotions by Its Business Partners
General J. Joseph Curran, Jr. announced today that his Consumer
Protection Division, along with those of 27 other states and Puerto
Rico, entered into an agreement with credit card issuer First USA
Bank, now known as Bank One Delaware, to reform the way products
are marketed to its customers by telemarketing firms.
For many years, First USA has contracted with telemarketing firms
that sell a variety of products and services to bank customers.
In exchange for providing its customer lists, First USA receives
a percentage of the sales by these companies.
states raised concerns that the marketing practices of First USA's
business partners were deceptive and often resulted in consumers
being charged for products and servicessuch as discount buying
clubs, roadside assistance, credit card loss protection and dental
plansthat they had no idea they agreed to purchase.
solicitations relied on free trial offers that failed to adequately
disclose that it was the responsibility of the consumer to cancel
during a trial period. Making matters worse, because individuals
were not asked to provide their credit card information directly
to the vendor, many consumers did not understand that their credit
cards would be charged once the free trial period expired.
USA profits by sharing information about its customers with telemarketers,"
Curran said. "This settlement requires it to ensure that telemarketers
using its customer lists do not engage in deceptive practices."
settlement agreement requires First USA/Bank One to include consumer
protection policies in its contracts with telemarketing firms. These
Prohibit deceptive solicitations;
Require the bank to review and approve all scripts and marketing
materials to ensure they comply with the agreement;
Require telemarketing firms to comply with all applicable
consumer protection laws;
Prohibit customer charges unless there is express authorization
of the account holder; and
Require clear and conspicuous disclosure of the identity
of the telemarketing company if the script makes reference to the
USA also is required to resolve any complaints from card holders
who indicate that a charge is unauthorized. First USA agreed to
pay the states a total of $1.3 million, of which Maryland will receive
$26,041 for consumer education.
Maryland in the agreement with First USA are: Arizona, California,
Colorado, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Michigan, Mississippi, Missouri, Montana, Nevada, New
Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,
Puerto Rico, Texas, Vermont, Washington and Wisconsin.