FTC Settlement on Credit Cards Noted

22 January 1999

Interesting news keeps coming out on gaming-related credit card suits. The U.S. Federal Trade Commission has announced landmark settlements with two companies accused of bilking U.S. credit card holders.

You may recall the Canadian lottery telemarketing schemes that were actively prosecuted in recent years. Intermediary companies informed cardholders they had been selected to play for a large lottery prize that would be tax-free in the United States. This triggered charges of laundering credit card numbers.

Woofter Investment Corp., a Las Vegas company that processed credit card sales drafts for more than 50 Canadian foreign lottery telemarketers, agreed to pay $1 million in the settlement with the FTC. In addition, Woofter's client, Pacific Rim Pools International and its owner Michael Loukas, will pay an additional $300,000 in restitution.

"These settlements are a terrific opportunity for consumers lured with lottery offers to take off those rose-colored glasses," says Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. Woofter is accused of making its Visa and MasterCard merchant accounts available to telemarketers for a 15% fee, a violation of the FTC's Telemarketing Sales Rule, added Bernstein.