Consumer Alert

Be Wary of Pre-Recorded Telephone Messages
Offering to Reduce Your Credit Card Debt

The Consumer Protection Unit of the Alaska Attorney General's Office has become aware of a company or companies that are leaving pre-recorded messages on the answering machines of consumers in Alaska. The messages tell consumers that they can reduce their credit card debt or consolidate their credit card balances and become debt free. Some of the messages indicate that the business involved is a nonprofit entity. The messages ask the consumer to call a toll free number for more information.

Consumers should be aware that these calls may violate Alaska's Unfair Trade Practices and Consumer Protection Act. With certain exceptions, it is a violation of this law for telemarketers to use automated or recorded messages as a telephonic advertisement or solicitation.

Also, consumers should be careful about any unsolicited offers to consolidate debts. For consumers who are experiencing financial difficulties because of debts from credit card use, medical bills, store charge accounts, or other reasons, offers to reduce monthly payments may seem like a solution to their problems. But consumers should be wary of quick-fix solutions for credit problems.

The Commonwealth of Massachusetts recently sued a Florida-based telemarketer alleging that it used false and misleading information to lure consumers into purchasing the services of a credit counseling agency. In a press release about the lawsuit, the Massachusetts Attorney General stated, "This firm made more than one million pre-recorded phone calls around the state promising help with credit card debt. But those messages never said anything about the hidden up-front fees and monthly charges. Consumers who thought they were signing up for non-profit credit counseling services were actually paying money for a for-profit telemarketer."

If you need help solving your financial problems, every state has non-profit organizations that counsel and educate consumers on debt issues, budgeting, and using credit wisely. If you want to work with a credit counselor to consolidate your debts, do some research first. Any reputable credit counseling agency should send you free information about itself and its services, and you should not be required to first give details about your financial situation. You should ask about all fees or costs involved. If the plan requires you to pay an up-front fee or a monthly administrative fee, be sure to understand the purpose of these charges.

If you feel that you have been a victim of illegal telemarketing, have been misled about debt consolidation services, or have been a victim of other types of unfair or deceptive acts or practice, we encourage you to file a consumer complaint. Go to for more information, or call 907-269-5200.

For more information on credit issues, check out the following links:

Consumer Protection Unit
April 2003