Canadian-Based Telemarketers Settle FTC Charges of Misrepresenting Their Credit Card "Protection" and Y2K Fixes Program

For Release

A Canadian based-company, NCCP Ltd. and its owner, Cary Title, have agreed to pay $100,000 to settle Federal Trade Commission charges that they falsely represented their credit card protection program including protection against potential Y2K-related problems. This is the FTC's first Y2K-related fraud case. The Commission alleged that the defendants' telemarketers violated the FTC Act and the Telemarketing Sales Rule (TSR) by making false or misleading statements to induce consumers to purchase the company's services. As part of the settlement, NCCP and Title have agreed to be permanently banned from engaging in the credit card protection and credit card registration business. The settlement also prohibits the defendants from making any misrepresentations of fact material to a consumer's purchasing decision.

"These con artists were making money selling imaginary fixes to imaginary problems," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "They were playing on consumers' fears about the Year 2000 computer bug and its potential impact on financial services," Bernstein said. "Smart consumers know that their liability for lost credit cards is limited to $50 per card and that credit card companies are working to ensure that their cards work in Y2K."

"The Y2K issue has the short-term potential to create a new class of charlatans looking to make a quick profit at the expense of unsuspecting individuals," said John Koskinen, Chair of the President's Council on Year 2000 Conversion. "Consumers should beware of anyone trying to sell them so-called essentials for the Year 2000 especially in areas like financial services where companies are well-prepared," said Koskinen. "The Council's toll-free hotline - 1-888-USA-4-Y2K - is a great resource for consumers who have questions about the date change."

The FTC filed its complaint against NCCP Ltd., doing business as National Credit Card Protection Ltd., and Cary Title in federal district court. NCCP is headquartered in Toronto, Canada. NCCP Ltd. is a telemarketing company that purported to protect consumers from financial loss resulting from the loss or theft of their credit cards. The FTC alleged that NCCP's telemarketers falsely represented to consumers that they were calling from, or on behalf of, the consumers' credit card issuer. In addition, the FTC alleged that NCCP falsely stated that consumers had only 48 hours to report the loss or unauthorized use of their credit card to avoid liability for the charges. In fact, federal law limits consumers' liability for unauthorized charges to $50 per credit card, and there is no time limit for reporting loss, theft, or unauthorized use of a credit card.

The FTC further alleged that the defendants, in an effort to induce consumers to buy their credit card protection program, offered consumers a Y2K protection package that they said would obviate Y2K-related problems. The package consisted of nothing more than adhesive stickers.

According to the FTC, the defendants told consumers that the adhesive stickers would safeguard against potential Y2K problems once they were applied to the consumers' credit cards. The Commission also alleged that the defendants failed to promptly disclose that they were conducting a sales call.

The settlement bans NCCP Ltd. and Cary Title from selling credit card protection or registration programs. In addition, the order prohibits them from making misrepresentations about Y2K protection, from future violations of the TSR, from misrepresenting their affiliation with any consumer credit card issuer, from misrepresenting any consumers' legal rights or obligations, and from disclosing information about consumers that purchased credit card protection from them.

The settlement requires that when the defendants tape record a sales transaction or its verification, they record the entire conversation with the consumer verifying his or her consent to purchase the service, including specific disclosures of material terms. The settlement also contains other recordkeeping requirements to help the FTC monitor the defendants' compliance with the settlement.

The FTC, in cooperation with the Federal Financial Institutions Examination Council and the President's Council on Year 2000 Conversion, has issued a consumer alert - "Y2K? Y 2 Care: Protecting Your Finances from Year 2000 Scam Artists." The FTC also has prepared a series of consumer alerts to inform consumers and industry about Y2K issues. In addition to the alerts, consumers can call a free hotline -- 1-888-USA-4-Y2K - for information about Y2K topics. Copies of all the Y2K Y 2 Care consumer and business alerts and other Y2K information are available from the FTC's web site at and and also from the FTC's Consumer Response Center.

The Commission vote to authorize staff to file the complaint and stipulated final judgment was 4-0. The complaint and stipulated final judgment were filed in the U.S. District Court, Western District of New York, in Buffalo, on July 22, 1999, and the judgment was entered by the Court on July 23, 1999.

NOTE: This stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the news release are available from the FTC's web site at and copies of the complaint and stipulated final judgment are available from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 1-877-FTC-HELP (1-877-382-4357); 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.


(FTC Matter No. 9823053)
(Civil Action No. 99 CV-0501 A(Sc))

Contact Information

Media Contact:
Brenda Mack
Office of Public Affairs
Staff Contact:
Heather Hippsley or Stephen Cohen
Bureau of Consumer Protection
202-326-3285 or 202-326-3222