© 2022 St. Louis Public Radio
Play Live Radio
Next Up:
Available On Air Stations

Has Rachel from Cardholder Services stopped calling? FTC is still on trail of illegal robocalls

This article first appeared in the St. Louis Beacon, Nov. 20, 2012 - Dear Rachel of Cardholder Services,

Where ya been, hon?

You never call me anymore.

Was it something I said?

Nah. Couldn’t be, since I’ve said plenty to your minions who have tried to lure me into your credit card interest-rate reduction schemes these many past months. THEY hung up on me, but YOU always called back. 

Could it be that you finally removed me from your list when I pressed 2?

Doubtful. Because I wishfully … angrily … pressed 2 again, and again and again.

And still you called.


And again.

And again.

Could it be that the FTC finally tracked you down and took your phone away?


FTC pulls the plug

If your phone isn’t ringing so often these days, it could be because the Federal Trade Commission has shut down five companies in Arizona and Florida allegedly responsible for millions of illegal, unwanted robocalls from "Rachel” and the rest of her gang from "Cardholder Services.”

(Perhaps some of us didn’t notice that Rachel had stopped calling because when the FTC's announcement was made on Nov. 1, politicians were clogging our phone lines with equally unwanted -- but legal -- political pleas.)

Sick of Rachel?

* To file a complaint, visit the FTC's online Complaint Assistant or call 1-877-382-4357.

* The FTC offers tips for consumers, as well as two new consumer education videos explaining robocalls and describing what consumers should do when they receive one.  

* An interesting graphic on the FTC website explains how illegal robocalls are made

* The website detailing the $50,000 cash bounty for a solution to stop robocalls includes ideas already submitted by consumers. The proposals range from the serious and highly technical, with creative names such as Kill Kall, to simple low-tech whistleblowing: as in get a whistle and blow it.

The FTC sued in federal court to halt temporarily the robocallers who are accused of deceiving American consumers into paying thousands of dollars in bogus schemes to have their credit card interest rates reduced. The commission also held a summit in Washington in October to address the national plague of robocallers.

In the words of FTC chairman Jon Leibowitz, "Rachel from Cardholder Services" is "public enemy No. 1” and responsible for many of the more than 200,000 complaints the commission gets from consumers every month.

Steven Baker, director of the FTC’s Midwest region, said the Rachel recording is used by numerous operations to target consumers who are deep in credit card debt and paying high interest rates. When consumers get Rachel robocalls and press 1, they may be connected to any one of these companies that are operating independently but doing the same thing.

"People think the call is coming from their bank or credit card company,’’ Baker said. "These folks promise they can drastically reduce interest rates and promise savings of about $2,500. Then they charge for the service, usually $1,000 to $3,000, and put those charges on the credit cards the people are already struggling to pay.’’

The companies charge up-front for their "services,” which usually consist of arranging three-way phone conversations between themselves, their "clients" and the credit card companies. Not only is this something consumers could do on their own, but the credit card companies usually decline the requests for interest-rate reductions, leaving consumers deeper in debt. In some cases, the scammers apply for introductory-rate credit cards for their clients, but the rates are temporary, and people with bad credit aren’t approved.

"The long and the short of it is nobody really gets any savings after paying these people all this money,’’ Baker said.

The corporate assets of the five "Rachel” companies sued by the FTC have been frozen along with the personal assets of the owners. The operations have been shut down, at least for now, and the goal is to get some money back for consumers who have been ripped off.

In most cases, the Rachel companies operate telephone boiler rooms that pay "dialing companies” to actually place the robocalls and then transfer the calls to them. The FTC is continuing its hunt for the dialing companies, as well.

"We sued one company that was making illegal robocalls. In an 18-month period they placed 2.6 billion telephone calls,’’ Baker said.

(Yes, he said 2.6 BILLION.)

Baker understands the frustrations of consumers because he gets the calls himself.

"They’re really angry about these calls. We’re trying,’’ he said.

At its Robocall Summit, the FTC issued a challenge to the public offering a $50,000 cash prize for the best technical solution to block illegal robocalls on both landline and mobile phones.

"You try to go after consumer problems with a range of different strategies,” Baker said. “One of them is finding people and suing them. Another is consumer education. Another is whether there is some technological solution to prevent or screen these calls.’’

The Rachel Five

All of the Rachel robocallers use a similar process: Rachel announces an "important message” about a consumer’s eligibility to reduce high credit card interest rates. Consumers are urged to "press 1” to connect with a live representative, or "press 2” to discontinue getting the calls. Consumers who press 1 are connected to live telemarketers in boiler rooms. Pressing 2 disconnects the call but does not remove consumers from dialing lists. Answering the calls actually increases your chances of getting more calls, according to the FTC.

The robocallers often circumvent Caller ID by "spoofing,” or displaying a false number. The name displayed on the Caller ID is usually generic, such as "Card Services,” and offers vague identification about who is actually calling.

The five companies shut down by the FTC were all in Florida or Arizona: Treasure Your Success; Ambrosia Web Design; A+ Financial Center, LLC; The Green Savers; and Key One Solutions, LLC. The complaints alleged that the defendants violated the FTC act by misrepresenting to consumers who buy their services that they will have their credit card interest rates reduced substantially and will save thousands of dollars in interest on their debts.The defendants were charged with violating the Telemarketing Sales Rule (TSR), for misrepresenting their services, calling numbers on the Do Not Call Registry, and collecting up-front fees. The TSR also prohibits charging a fee in advance for debt relief services.

As always, should you receive a Rachel call, don't fall for her tricks -- and register a complaint with the FTC

Mary Delach Leonard is a veteran journalist who joined the St. Louis Beacon staff in April 2008 after a 17-year career at the St. Louis Post-Dispatch, where she was a reporter and an editor in the features section. Her work has been cited for awards by the Missouri Associated Press Managing Editors, the Missouri Press Association and the Illinois Press Association. In 2010, the Bar Association of Metropolitan St. Louis honored her with a Spirit of Justice Award in recognition of her work on the housing crisis. Leonard began her newspaper career at the Belleville News-Democrat after earning a degree in mass communications from Southern Illinois University-Edwardsville, where she now serves as an adjunct faculty member. She is partial to pomeranians and Cardinals.

Send questions and comments about this story to feedback@stlpublicradio.org.