Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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Misleading Credit Card Service

February 22, 2000

Attorney General Hardy Myers today announced that a Nevada corporation that sold misleading credit card services bundled with offers of advance fee loans must change its marketing practices and provide refunds to more than 600 Oregonians. Named in an Assurance of Voluntary Compliance are Consumer Credit Services, Inc.(CCS) of Las Vegas, Nevada and its president, Eric A. Peterson of Los Angeles, California. The agreement, which admits no violation of law, was filed today in Marion County Circuit Court.

"Schemes offering loans and credit cards based on advanced fees target vulnerable and desperate consumers who are in need of credit or a loan," Myers said. "Over the last five years, the Oregon Department of Justice and the Federal Trade Commission have worked together to track down and stop this new breed of loan sharks."

Department investigators determined that in 1998 and 1999 CCS mailed offers to thousands of Oregon consumers who paid between $149.99 and $169.99 for "the Cash Plus credit card" a credit card that in fact could only be used to buy goods out of the company's catalog. In addition, consumers were led to believe they could receive up to $5,500 in cash advances at an 11.99% fixed interest rate. In fact, consumers were only eligible to receive $20 - $150 through a complicated check cashing arrangement.

Under the terms of the assurance, CCS must make a full refund offer to all of its members in Oregon and make refunds previously promised to consumers no later than April 28, 2000. CCS also will pay $10,000 to the Department of Justice consumer protection and education fund.

Attorney General Myers offers the following consumer tips when responding to ads that promise easy credit, regardless of credit history:

  • Legitimate lenders never "guarantee" loans or credit cards before receiving consumer applications. This is especially true if an applicant has bad credit, no credit or has been through a bankruptcy.
  • When applying for a real estate loan, it is accepted and common practice for lenders to request payment for a credit report or appraisal.
  • Never provide credit card account numbers, bank account information or Social Security numbers over the telephone or Internet unless the request is from a familiar company and it is clear why the information is needed.
  • Always obtain a written credit offer. Never pay money up-front for a promise of future credit. It is fraud and it is against the law.

Consumers who want information on advance fee credit cards and loans may call the Attorney General's toll-free consumer hotline at 1-877-877-9392 or (503) 378-4320 (Salem area only) or (503) 229-5576 (Portland area only).


Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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