North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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AG Cooper pulls the plug on telemarketers' calls to NC consumers

Release date: 9/12/2005

Raleigh: A telemarketing operation that took thousands of dollars from people in North Carolina for phony vouchers for major retailers and movie theaters has been banned from doing business in the state, Attorney General Roy Cooper announced today.

“Scammers who want to take consumers' money and give them nothing in return have no business doing business here in North Carolina,” said Cooper. “We've put a stop to this telemarketers' calls, and I intend to make sure they won't be making their tricky pitch to anyone else in our state.”

County Senior Superior Court Judge Donald W. Stephens today granted Cooper’s request for an injunction to stop the Consumer Rewards Network of Canoga Park, California from telemarketing to or taking money from North Carolina consumers while Cooper’s suit against the company goes forward. Telemarketers working for the company also made pitches claiming to be agents for Wal-Mart Stores, Inc. and K-Mart Corporation.

According to Cooper’s suit against Consumer Rewards, the company promised consumers $500 in vouchers to spend at Wal-Mart or K-Mart or $200 to spend at local movie theaters in exchange for fees of less than $5. Instead, the telemarketers debited consumers’ bank accounts for more than $100 each then failed to deliver the promised vouchers. North Carolina victims lost amounts ranging between $119 and $399.

Cooper’s suit contends that Consumer Rewards also broke the law by calling North Carolinians whose phone numbers appear on the Do Not Call Registry and by failing to register as a telemarketer. The Attorney General is asking the court to permanently block Consumer Rewards from doing business in North Carolina and to order the company to pay refunds to consumers and civil penalties to the state.

The Attorney General’s Consumer Protection Division has received 42 complaints from consumers across the state who were hit by this telemarketing scam since October of 2004. Telemarketers with Consumer Rewards even called the Attorney General’s office with their pitch.

Many consumers who got these calls reported that telemarketers offered them $500 worth of Wal-Mart vouchers for $4.95 in shipping costs. However, once they provided their bank account numbers, the telemarketer debited their accounts for $129 and they received nothing in return. Telemarketers offered some consumers $200 worth of movie vouchers for $3.95. These consumers were charged $119 and either got nothing in return or movie passes for theaters in distant cities. Some consumers’ accounts were debited more than once.

As alleged in the complaint, Consumer Rewards also pitched discount clubs that consumers could join for a fee. People who paid the money to sign up either received nothing or a packet of useless materials.