Attorney General's News Release

April 30, 1997

KC business that charged advance fee for credit cards must pay restitution to consumers, payment to five states

Jefferson City, Mo. — Consumers who paid $269 to a Kansas City business thinking they would receive a credit card but instead received credit card applications will be eligible to receive restitution under a federal court order entered today, Attorney General Jay Nixon said.

Nixon and attorneys general from New Jersey, New York, Pennsylvania and Wisconsin filed suit last June against Gary Tuck and his business, Medical Plus Network, charging that they told consumers that, for the advance fee of $269, the consumers were highly likely to receive credit cards with low interest rates. The Federal Trade Commission's Telemarketing Sales Rule prohibits telemarketers who guarantee consumers a loan or credit to ask for money in advance.

Instead of receiving the credit card, Nixon said, consumers received an application packet listing various banks which Medical Plus Network claimed to have low interest rates. Consumers also found the money-back guarantee Medical Plus offered to be extremely limited in scope and were often unable to obtain refunds as promised, Nixon said.

"Advance fee loan scams target people who have trouble getting credit and thus prey on the very people who can least afford to be throwing away money," Nixon said. "Law enforcement agencies on a state and national level are using the Telemarketing Sales Rule to go after scam artists who take much and deliver little."

Under the court order, Medical Plus Network and Tuck must pay refunds to any of their customers who have not already received a refund and who file a written request by July 29, 1997 with Medical Plus or the Missouri Attorney General's Office. Written requests to the Attorney General's Office should be sent to 3100 Broadway, Suite 609, Kansas City, MO 64111, Attention: Medical Plus Network Restitution.

In addition to the restitution, which is anticipated to total about $20,000 nationwide, Medical Plus and Tuck also will pay costs and penalties totalling $15,000 to be divided equally among the five states. They also are prohibited from violating state and federal laws in representing charges or their ability to obtain loans or credit for consumers.

Nixon said there are several tips for consumers to avoid being taken by advance fee loan scams:

• Legitimate lenders never "guarantee" or say that you are likely to get a loan or a credit card before you apply, especially if you have bad credit, no credit or a bankruptcy.
• If you don't have the credit offer in hand, or confirmed in writing, and a telemarketer asks you to pay an advance fee, don't. Such a solicitation is illegal.
• Check out unfamilar area codes, as they may be from Canada or the Caribbean and may indicate fraud that crosses international borders.

Consumers who have complaints about businesses that charge advance fees for loans or credit can call the Attorney General's Consumer Protection Hotline at 1-800-392-8222. Speech- or hearing-impaired persons may call 1-800-729-8668. Consumers also can report fraudulent telemarketers to the FTC's National Fraud Information Center at 1-800-876-7060.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818