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Company ordered to pay Arizona $27M for scam

Company ordered to pay Arizona $27M for scam

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PHOENIX — Two Arizona companies and their officers have been ordered to pay more than $27 million for bilking consumers in this state and across the nation.

A Maricopa County Superior Court jury on Wednesday assessed $10.4 million against HD Benefits for deceptive telemarketing scripts that led consumers to believe they could get low-interest credit cards if they paid a fee of $369.

What they got instead, according to Attorney General Janet Napolitano, was "only a list of banks offering these cards, many of which had the available rates for a short period of time."

The jury also awarded another $400,000 for violating state telephone solicitation requirements.

Jurors did not find that the scripts prepared by Furtherance International were deceptive.

But they did conclude that the telemarketers hired by that firm did not follow the scripts and made false assurances or misrepresentations, such as lying about the company they represented.

Furtherance, which operated under the name Premier Card Services, charged consumers $299 to purchase special "protection" packages for their credit cards, such as for losses or wrongful charges — services that often are provided at no cost by credit card companies. That company has been ordered to pay $6.8 million in civil penalties.

According to the Attorney General's Office, the two operations are sister companies, with both controlled by Wesley J. Gumeringer and Steven R. Stevason. Each was assessed $5 million for their part in allowing consumer fraud violations to occur.

Napolitano said that, in some cases, there were unauthorized charges to some consumers' credit cards and refunds were not made despite repeated requests.

That isn't the end of the companies' problems. Napolitano said her attorneys will now ask the court to reimburse consumers.

The Attorney General's Office said they received more than 900 complaints. But the jury concluded there were 40,000 violations of the law.

No estimate was immediately available of how much money was improperly taken from consumers.

"This winning verdict for consumers sends a message to scam artists: Your credit is no good in this state," Napolitano said.

— Arizona Daily Sun

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