Sometimes there is justice...

| Contact Center/CRM Views and Analysis

Sometimes there is justice...

Kudos to the U.S. justice system, which has given lengthy jail times to three Canadians convicted in a multimillion dollar telemarketing scam. The Canadian Press reported that Lloyd Prudenza, the last of them has been sentenced to 15 years by a U.S. court, according to the Competition Bureau of Canada.

The wire service said that compatriots David Dalglish and Leslie Anderson were given sentences of 19 and 23 years respectively in July 2008 and ordered to repay nearly $5.6 million of the $8 million the U.S. government says their scheme raked in from 40,000 Americans.

The three used the name "First Capital Consumers Group" in targeting U.S. residents with blemished or no credit, promising them by unsolicited telephone calls a MasterCard or Visa credit card for an advance fee of $189 to $219.

"Our cross border efforts have succeeded in bringing the last individual involved in a scam that defrauded many consumers to justice," the bureau's deputy commissioner, Andrea Rosen, said in a statement. "The severity of these sentences should serve as a warning that deceptive telemarketing is treated seriously on both sides of the border."

It is efforts like these--Canadian and American authorities have been working closely together for the past several years on 'telefraud', that are helping to protect telemarketing as a valuable sales medium.

Kudos too to the Federal Reserve Board, the National Credit Union Administration, and the U.S. Office of Thrift Supervision (OTS) for cracking down on another set of dubious credit card activities: the customer-hostile practices of card issuers.

The three agencies issued a final rule that bans practices they say are often cited as unfair to consumers, such as raising the interest rate on an existing credit card balance when the consumer is paying the credit card bill on time.

The new regulations require that consumers receive a reasonable amount of time to make their credit card payments, prohibits payment allocation methods that unfairly maximize interest charges and, in the subprime credit card market, limits fees that reduce the credit available to consumers.

"I am extremely proud that OTS leadership has culminated in this important rule to ensure fair treatment for the millions of Americans who use credit cards," said OTS Director John Reich.  "The rule will enhance public confidence in financial institutions and establish a level playing field for institutions that want to do business fairly without suffering competitive disadvantages."

While these changes will cost credit card firms they will also save them and make them more money in the long-haul: by avoiding waves of long and angry calls to their contact centers from irate cardholders and by retaining them as customers interested in having profit-making debt when the economy turns around...

In short what the FRB, NCUA, and OTS have done is force-feed CRM to an industry long on greed and short on sight...

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