Telemarketing Companies That Sold Credit Card Protection Services Agree to Pay Civil Penalties to Settle FTC Charges

For Release

GEP, INC., and Bank Card Security Center, Inc., both of Casselberry, Florida and their owner, Steven Zwicker, have agreed to pay a $44,000 civil penalty, and in a separate settlement, Executive Industries, Ltd., and its owner Tony Cosantino, have also agreed to pay $22,000 in civil penalties to settle Federal Trade Commission charges. Both sets of defendants were charged by the FTC with selling a program that they claimed protected consumers from losses associated with lost or stolen credit cards. The companies misrepresented the extent of cardholders' liability for the unauthorized use of a credit card, as well as the companies' affiliation with consumers' credit card issuers. The FTC alleged that the defendants, during their sales pitch, also violated the FTC Act and the Telemarketing Sales Rule (TSR) by making false and misleading statements to induce consumers to purchase their services. In addition to paying civil penalties, both settlements also would prohibit the defendants from making any misrepresentations of fact material to a consumer's purchasing decision.


According to the FTC's complaint detailing the charges, GEP and Executive Industries sold the credit card protection program through telemarketing rooms on behalf of Tracker Corporation of America. (Tracker was a defendant with whom the FTC recently settled. According to that settlement, Tracker, a Canadian corporation and its president, Bruce Lewis, are permanently barred from selling credit card protection.) Bank Card Security Center sold the same program for itself. The FTC alleged that the defendants falsely represented to consumers that they were calling from, or on behalf of, the consumers' credit card issuer. The FTC also alleged that the defendants falsely stated that to avoid liability for unauthorized charges, consumers only had 48 hours to report loss of a credit card, or its unauthorized use, and that failing to do so, consumers could be liable for thousands of dollars in unauthorized charges. In fact, federal law limits consumers' liability for unauthorized charges to $50 per credit card, and there is no specified time limit for reporting loss, theft, or unauthorized use of a credit card.


In separate proposed settlements, the defendants would be prohibited from future violations of the TSR, misrepresenting affiliation with any consumer credit card issuer, misrepresenting any consumer legal rights or obligations, or misrepresenting any other material fact to consumers. The settlements also would prohibit the defendants from disclosing information about consumers who purchased credit card protection from them.


Finally, the settlements contain other recordkeeping requirements to assist the FTC in monitoring the defendants' compliance.


The Commission vote to forward the complaints and the proposed consent decrees to the Department of Justice for filing was 4-0. The complaint and consent decree against Gep, Inc., Bank Card, and Swicker were filed in the U.S. District Court for the Middle District of Florida, in Orlando on February 23, 1999. The complaint and consent decree against Executive Industries and Costantino were filed in the U.S. District Court, District of Arizona, in Phoenix on February 23, 1999. They are subject to court approval.


NOTE: These consent decrees are for settlement purposes only and do not constitute an admission by the defendants of law violations. Consent decrees have the force of law when signed by the judge.


Copies of the two complaints and proposed consents are available from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. Copies of news releases and other materials are also available from the FTC's web site at



(Bank Card et al., FTC File No. 982 3201; Civil Action No. 99-212-Civ-Orl-18C)
(Executive Industries, FTC File No. 982 3540; Civil Action No. CIV99-0344 PHX SMM))

Contact Information

Media Contact:
Brenda Mack,
Office of Public Affairs
Staff Contact:
Stephen Cohen or Betsy Broder
Bureau of Consumer Protection
202-326-3222 or 202-326-2968