Monday, June 8, 1998 | 9:27 a.m.
CARSON CITY -- A Las Vegas company that offered a credit line to people with bad credit histories agreed to pay $5,000 to reimburse victims in a deceptive trade practices case.
Consumer Credit Services Inc., owned by Eric A. Petersen, 31, of Las Vegas, did not admit any wrongdoing in the stipulated judgment filed Friday in U.S. District Court in Las Vegas.
Deputy Attorney General Jane Femiano said there were 40 complaints -- all from out of state -- filed against Consumer Credit and its advertising.
In a nationwide mailing, consumers were told they had been "approved" for a $2,500 unsecured credit line from the Financial Card Division of Consumer Credit, regardless of the person's past credit. The advertisement was stamped "urgent" and displayed the logos of Mastercard and Visa.
What was not disclosed was there would be a $149 fee to obtain the credit line and the money could only be used for purchases from catalogues of Consumer Credit. Additionally, the $2,500 cash advance was limited to an initial cash advance of only $10.
Consumers also did not receive a Visa or Mastercard but got only the "in-house" credit card from Consumer Credit and a form to use in applying for a Visa or Mastercard.
Femiano said an audit will be conducted to determine the allocation of the money to the victims. The company also agreed to change its advertising to comply with federal and state deceptive trade and telemarketing laws.
For example, it will no longer advertise the Mastercard and Visa logos and will disclose the $149 fee in its advertising.
"Legitimate lenders rarely guarantee an extension of credit before evaluating a consumer's credit worthiness," Attorney General Frankie Sue Del Papa said. "It is against state and federal law for a lender to require payments in advance of performing services."
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