Credit Card Scams
Over our decades of litigation practice, we have observed a number of businesses that induce consumers into opening high-rate credit cards in order to pay their "services." In most instances, the "services" are prohibitively expensive for a consumer to pay out of pocket. The Company sets the price of services so high that a consumer cannot possibly afford the alleged services. The services are advertised a certain way, oftentimes misrepresented, and the consumer comes away with nothing more than high credit card debt and in return.
It is the mentality of the Companies, that the price of these alleged services is "whatever the market will bear." Put differently, the alleged services have virtually no relation to 1) the time devoted by an alleged "professional" in the field; 2) the complexity of the work; 3) the experience of the offerors; 4) the uniqueness of the services; or 5) any standard cost in the same or similar industry. The Company offers an exorbitant price and then has preferred relationships with credit card lenders to sign up swaths of consumers.
Naturally, this brand of false advertising and misrepresentation lends itself to the potential for a class action lawsuit. These companies' policies of mass consummation of credit card agreements are policies and practices in getting consumers to sign up and pay. A class action should be explored when considering this type of case.
We have found these in a number of contexts:
One context was payment for medical services not covered by insurance. Whether it is a cosmetic procedure or one that is simply not covered by insurance, these services can cost in the tens of thousands. Setting prices in the medical field is somewhat "easy pickins'." Consumers generally know when they walk into a medical professional's office, they are going to pay large fees. It is the lamb walking into the lion's den. Again, payment for these medical or dental services is exorbitant, and oftentimes only payable through a credit card. Recently, we handled a case with respect to dental services. The consumer was so over-burdened with debt, she was financially ruined. In many of these instances, the full services have not even been rendered. At the end of the day, the consumer was left with bad debt and a mouthful of more dental work necessary.
Another context was real estate education courses. Since the real estate boom in the early 2000s, certain "experts" sprung up touting their services in educating consumers in buying and selling homes and commercial properties, "flipping" and even lending in some instances. These entities charge outrageous fees for their "expertise" in real estate acquisition, promising consumers unimaginable passive income and wealth. Consumers quickly learn however, after paying tens of thousands of dollars on "education" fees, they are no closer to a real estate portfolio than when they started. These scams start again with false and misleading advertising and lead to heavy credit card debt, again with nothing to show for it. The credit card bills don't stop; but the phantom income promised does stop leaving consumers financially underwater.
Still another context is alleged religious "consultation services." These services are offered almost as therapeutic or psychological services, by utterly non-qualified individuals. Again, the emphasis of these entities is to separate consumers from their money, their religion and even their families, and finance their fees on a bright new credit card. As in the above examples, consumers quickly realize the only people benefitting from these transactions are the "service" providers and the credit card companies themselves, creating another example of "dead money" on consumers' balance sheets.
These are not an exhaustive list of scenarios where consumers are duped into overwhelming credit card debt to pay for useless, unneeded or unnecessary services. These are only the specific scenarios we have been involved with and are fighting in Court.
If you believe you are a victim of this type of credit card scam in New York or New Jersey contact us online or call (212) 655-9536 for a free initial phone consultation.