Mr. Miller said the telemarketers involved in the underlying
schemes that drew the attention of investigators included
Rockwell Holdings, Inc., Hartford Auto Club, Premium Mega Saver,
and Capital First Benefits. He said that many of the fraudulent
telemarketers worked through an intermediary called a "third
party processor," namely, Global eTelecom, Inc. ("GETI").
FIRST PREMIER: Agrees To Set Measures Against Fraudulent Schemes
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A South Dakota bank that processed electronic withdrawals from
the bank accounts of Iowa victims of telemarketing schemes has
agreed to adopt a set of proactive measures designed to screen
out such operations and prevent facilitating fraudulent schemes,
Iowa Attorney General Tom Miller said in a statement.
"We are very pleased that First PREMIER Bank of Sioux Falls, SD,
has agreed to take many positive steps to avoid processing
withdrawals for fraudulent schemes -- scams such as illegal and
deceptive telemarketing of credit cards for advance fees," Mr.
Miller said.
"First PREMIER has agreed to screen potential clients in
advance, monitor their practices, investigate warning signs, and
stop processing for clients that appear to be deceiving
consumers," he said. "We appreciate the Bank's leadership." The
agreement is in the form of an "Assurance of Voluntary
Compliance" between the Bank and Miller's office.
"In recent years telemarketing boiler-rooms operating out of the
U.S. and Canada have increasingly used automatic withdrawals to
get victims' money. Many schemes count on U.S. banks to gain
entry to the system for making these withdrawals. Active
monitoring by banks makes it harder for telemarketing con-
artists, and that's an important development," Mr. Miller said.
"In our view, the law requires banks NOT to assist any
telemarketer when the bank knows or should have known that the
telemarketer is engaged in fraudulent conduct."
Mr. Miller said his Consumer Protection Division worked jointly
with the offices of the Minnesota and South Dakota Attorneys
General in reaching the accord with First PREMIER. All three
offices entered the same agreement with First PREMIER Bank. The
Iowa and Minnesota Attorneys General initially contacted the
bank in 2002 in connection with efforts to investigate the
complaints of telemarketing fraud victims who had money
extracted from their bank accounts. The agreement announced
Wednesday also involved a total payment of $200,000 by the bank
to be divided among the three states. The funds will be used to
help cover costs of the investigation and consumer and industry
education.
"Services provided by the bank to fraudulent operators created
problems for consumers," Mr. Miller said, "but now the bank is
part of the solution. We hope other banks and other participants
in the ACH system - the network designed to allow for electronic
withdrawals from bank accounts - will follow First PREMIER's
lead in cracking down on schemes that victimize consumers."
Under the agreement, First PREMIER will investigate would-be
clients before granting them access to the automated withdrawal
network. Once a pre-screened business is granted access, First
PREMIER will monitor the business's activities and cut off ACH
processing services if the business develops a high rate of
returned transactions or generates complaints that suggest
fraud. First PREMIER also agreed not to provide services to
operations selling credit cards or offering loans for an advance
fee.
Mr. Miller said the telemarketers involved in the underlying
schemes that drew the attention of investigators included
Rockwell Holdings, Inc., Hartford Auto Club, Premium Mega Saver,
and Capital First Benefits. He said that many of the fraudulent
telemarketers worked through an intermediary called a "third
party processor," namely, Global eTelecom, Inc. ("GETI").
First PREMIER Bank was not directly involved with any
telemarketing misconduct and assisted the Federal Trade
Commission in connection with its investigation and prosecution
of the telemarketers. Through the controls in place at the time,
First PREMIER Bank identified the problem companies and
ultimately stopped processing ACH transactions for them. The
Bank responded to inquiries from the Attorneys General offices
regarding the Bank's processing of the ACH transactions for the
telemarketers in question.
For more details, contact Bob Brammer by Phone: 515-281-6699.
To access the Assurance of Voluntary Compliance, visit the
Website:
state.ia.us
005/First%20PREMIER%20AVC%207-6-05.pdf. |
