North Carolina Department of Justice
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AG Cooper announces refunds for consumers taken by telemarketers

Release date: 8/24/2005

Thousands of NC consumers may be eligible for refunds from American Savings Discount Club

Raleigh: North Carolina consumers who paid money to American Savings Discount Club (ASDC), a company that pitched fraudulent loans over the telephone, will soon be able to claim refunds, Attorney General Roy Cooper announced today.

“These telemarketers tricked consumers into signing up for overpriced loans,” said Cooper. “We were able to put a stop to this scam, and now consumers can get their money back.”

Letters including refund claim forms are being mailed this week to approximately 20,000 North Carolinians who may be eligible to seek refunds. ASDC is paying $2.1 million for consumer refunds and the cost of administering the refund claim process.

The refunds are part of a settlement approved in August of 2002 to settle claims made in Federal Court by Cooper, the Federal Trade Commission and the Attorneys General of Virginia and Wisconsin that American Savings Discount Club (also known as the Tungsten Group) violated FTC telemarketing rules and state laws. The Court ordered the company closed and its assets frozen the day after Cooper and the other plaintiffs filed the case.

As alleged by Cooper, the FTC and the other attorneys general, ASDC promised consumers low-interest loans of $500 to $1,500 in exchange for an up-front payment of $100, which included a $40 administrative fee and the first and last monthly loan payments of $30 each. Consumers who signed up had their bank accounts debited almost instantly. When consumers tried to cancel, they were told that the $40 fee was non-refundable.

After the first payment, consumers learned that they had been enrolled in a “discount club” and would have to pay a $30 membership fee for three months before applying for a loan. Consumers who eventually got a loan discovered that they owed a loan repayment fee on top of the club's monthly fee, resulting in total payments of nearly $41 per month for a 12-month, $500 loan, a fact never mentioned in the company's initial pitch.

To be eligible to receive a refund, consumers must complete the claim form and return it, postmarked no later than October 6, 2005 to: American Savings Discount Club Settlement Fund, Claims Administration Center, P.O. Box 2008, Chanhassen, MN 55317-2008.

The claim forms show the net amount that ASDC’s records indicate the consumer paid after subtracting any refunds or credits already received. Consumers who believe that their refunds should be based on a different amount must provide copies of documents (such as bank statements) to support their claim. The amount of any refund will depend upon the amount paid by the consumer and how many eligible consumers participate in the refund program. Claim forms are being sent to more than 34,000 consumers nationwide.

Consumers with questions about the refund process or who think they are eligible for a refund but do not receive a letter and claim form within the next ten days can call the Claims Administrator, Analytics, Inc., toll-free at 1-866-890-4856.