The Federal Trade Commission has shut down yet another l0w rate credit card scam – showing that not all balance transfer offers are created equal.

This one involved a company called National Card Monitor LLC. The FTC’s action happened in December 2012, and was the sixth credit card interest rate scheme the FTC had identified in just over a month.

Regulators say scams like these trick people into paying hundreds of dollars in fees based on the false promise that consumers will get low rate credit cards – or at least, lower rates than consumers currently have.

That’s why a federal district court in Arizona has temporarily shut down National Card Monitor, LLC, at the request of the FTC.

National Card Monitor had been charging individuals up to $599 in upfront fees in exchange for allegedly securing a lower-rate credit card on the customer’s behalf.

Consumer Beware

January is a popular month for balance transfer offers. That includes legitimate offers – as well as the bogus ones.

It’s not surprising that the New Year brings on a fresh wave of balance transfer deals from banks and credit card issuers. After all, once the holiday credit card bills arrive, people naturally start seeking credit cards with better interest rates in order to save money.

But if you’re looking for a good balance transfer offer, you’d be wise to avoid certain types of offers – like the ones offered by National Card Monitor and other companies with similar “deals.”

How the National Card Monitor Credit Card Scheme Works

According to the FTC, telemarketers working for National Card Monitor work by cold-calling consumers and telling them that they can reduce credit card interest rates and open up a lower-interest credit line on their behalf.

This would supposedly allow the consumer to transfer higher-interest balances onto the lower card, or pay off debts more quickly — thanks to a zero interest or lower-interest card.

But there was a catch, of course.

Consumers who accepted the offer had to pay a fee ranging from $499 to $599 to get in on the deal.

In its complaint, the FTC says most consumers found out that the National Card Monitor failed to deliver on its promise to secure the new credit card on their behalf. And even though the company claimed a 100% money-back guarantee, consumers found it difficult to get refunds they did not receive the promised cards.

The FTC charged National Card Monitor, LLC with violating the FTC Act and also with violating the Telemarketing Sales Rule because it was making unsubstantiated claims that consumers would receive a lower-interest credit card.

The firm also misrepresented its offer with a money-back guarantee. In addition, the FTC says the company ran afoul of the law by calling consumers who are on the Do Not Call Registry, failing to pay Registry fees, and requesting and receiving advance fees for credit cards via telemarketing.

Avoiding Credit Card Interest Rate Schemes and Scams

The FTC warns consumers about credit card scams and encourages you to avoid sales pitches from telemarketers and anyone offering any type of products and services that involve an upfront fee.

Some of the agency’s tips for avoiding credit card interest rate schemes and scams include:

• Don’t give out any current credit card information as part of an application process
• Avoid sharing any type of personal financial information or sensitive information
• Be skeptical of all types of unsolicited sales calls, and especially prerecorded calls or pitches
• Handle interest rate negotiations directly with your credit card issuer instead of working with a third-party claiming to negotiate on your behalf

Everyone carrying a balance on his or her credit cards would love to have a zero percent rate or a low-rate credit card. Paying fewer finance charges will no doubt save you money.

But anyone promising you such a deal in exchange for you paying an upfront fee is conning you.

So you have to be able to spot scam offers – and to know when someone is tempting you with a bogus or “too good to be true” deal.