Telemarketers to pay $7.5 million to settle alleged bogus-credit-card case

Telemarketers in Philadelphia and Jenkintown have agreed to pay more than $7.5 million to settle charges that they sold bogus "platinum" credit cards and stole money from cash-strapped consumers' bank accounts, the Federal Trade Commission said Wednesday.

The alleged scam defrauded 61,000 consumers of more than $6.1 million before a federal judge in Illinois shut it down in February, according to a court document in the case, which was filed by the FTC's Midwest region.

Agreeing to the settlement were two brothers, Blake Rubin of Huntingdon Valley and Chase Rubin of Rydal; and Justin Diaczuk of Philadelphia. Among their companies were Apogee One Enterprises L.L.C. and Marquee Marketing L.L.C.

A lawyer representing the defendants, Kenneth M. Dubrow of Chartwell Law Offices L.L.P. in Philadelphia, said Wednesday that he had no comment on the settlement. The defendants do not admit or deny any wrongdoing.

The alleged scheme involved phony credit cards, under brand names such as "Platinum Trust Card" and "Express Platinum Card."

They required an up-front payment of $69 to $99 and a recurring monthly fee of $19. Many of the victims had applied online for high-cost payday loans shortly before telemarketers contacted them about the card.

But instead of receiving the promised credit card that could be used like a Visa, MasterCard, or American Express card at Walmart and other stores, victims received, at most, "a thin plastic card with the shape and appearance of an authentic credit card," the FTC said.

The card could be used only at a collection of 10 online stores "stocked with a seemingly random assortment of off-brand, overpriced, and downright bizarre products," according to the FTC, "most of which are sold only in comically large quantities" - a case of 432 shower caps for $430.56, for example, and a case of 144 "play flutes" for $573.12.