Complaint Review: World Benefits - Champlain New York

APPELLATE COURT AFFIRMS A.G. AUTHORITY

TO PROTECT CONSUMERS ACROSS THE NATION

Spitzer Praises Decision Against Canadian Advance Fee Credit Card Scam

Attorney General Eliot Spitzer today hailed an appellate court decision that affirmed his authority to obtain restitution on behalf of individuals across the nation.

In a decision issued Thursday, the Third Department of the Supreme Court, Appellate Division affirmed a lower court decision against a Delaware corporation operating an advance fee credit card telemarketing scam out of Canada. The decision upheld an October 2001 ruling by Justice Joseph C. Teresi of Albany County State Supreme Court, which had halted the scam and awarded restitution to victimized consumers.

"Yesterday's appellate ruling affirms my office's authority to protect the interests of individuals across the nation doing business with New York-based companies," Spitzer said. "The ruling underscores the vital importance of maintaining the integrity of the marketplace in New York State."

Using the name Triple Gold Benefits, Telehublink Inc.'s telemarketers promised thousands of consumers across the nation that, for an advance fee of over $200, the consumers would receive a low rate, general purpose Visa or MasterCard credit card. In fact, consumers who paid the advance fee did not receive a credit card. Instead, Telehublink sent them a "discount benefits package" consisting of generally worthless items such as an application for a credit card.

As part of its scheme, Telehublink used a "drop box" address in Champlain, New York to send and receive mail in order to conceal the fact that its telemarketing operations were based in Canada.

The lower court ruling banned further operation of the scam and ordered Telehublink to make full restitution to all consumers who made payments to the company plus civil penalties based on the total number of victims.

On appeal, Telehublink argued that the Attorney General could not obtain civil penalties or restitution for victims not located in New York State. In its decision, the Appellate Division held that the Attorney General has the authority to obtain relief for victims nationwide, stating that "New York has a vital interest in securing an honest marketplace in which to transact business and this interest was threatened when Telehublink used a New York address to complete the deceptive transactions at issue here."

According to Telehublink's own filings, Triple Gold Benefits was a substantial windfall for the company. In its quarterly report filed with the Securities and Exchange Commission, Telehublink reported that its revenues increased by over $8 million from $1 million in 1999 to over $9.2 million in 2000, in large part due to Triple Gold Benefits sales. To date, Spitzer's office has received over 150 complaints, many from out-of-state consumers, about this scam.

Individuals with questions about advance fee credit cards and loans are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.

The case was handled by Assistant Attorneys General Mark Fleischer and Jane Azia of the Consumer Frauds and Protection Bureau and Assistant Solicitor General Andrea Oser.

Robert

Staunton, Virginia
U.S.A.

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