Consumers thought they could dial a number and get a credit card. But, Maryland authorities say, it was not so easy -- and not so cheap.
The phone call alone cost up to $50 for a credit card that turned out to be limited to a catalog of merchandise -- which often did not arrive, authorities say.
Lawyers for the the Consumer Protection Division of the Maryland attorney general's office say that Joel Katz, an Owings Mills businessman, masterminded the phony credit-card business and has defrauded thousands of consumers.
Yesterday, the state filed civil administrative charges against Katz, alleging that he violated the state's Consumer Protection Act.
Assistant Attorney General Peter V. Berns said his office started getting complaints about Katz's operation two years ago. At the same time, Maryland officials found out that the New York attorney general had fined Katz in 1989 for defrauding consumers in another credit-card scam.
Maryland officials learned that Katz runs his operation out of an office on the 600 block of Reisterstown Road in Baltimore County. He lives on the 11000 block of Hidden Trail Drive in Owings Mills.
State officials said he operates L.T.D. Unlimited Inc. and International Shoppers Spree Inc. and has done business under the name Credit Line 1000.
The operations have used television ads and automatic dialing devices to reach thousands of consumers, promising a credit card, a $1,000 line of credit and a $50 gift certificate.
Through the automatic dialing machine, potential customers are given one of several phone numbers (three 900 numbers and one local number). If they respond, they're later charged up to $50 for each call, Berns said.
The so-called credit card could be used only to order items from a special catalog, Berns said.
"People made the call and paid the charges -- thinking they were getting a general purpose credit card -- only to discover it is a catalog operation," said Berns.
Some people made the call and ordered items from the catalog, but got nothing -- except a bill, he said.
Berns said his office has received more than 45 complaints about Katz's operation.
Berns said Katz's operation is similar to several others around the country.
"In many of those cases, it's difficult for the state to deal with them because they're out of state and change their location an telephone numbers. This happens to be one of the few instances where we found somebody doing this from within the state," Berns said.
A hearing on the charges against Katz is scheduled April 16 at 9:30 a.m. at the University of Maryland Law School, 510 W. Baltimore St., Room 410.