Md. consumers warned of easy-money scheme

December 10, 1992|By David Conn | David Conn,Staff Writer

A California businessman has been offering Marylanders once-in-a-lifetime opportunity to make loads of easy money. But officials from various states are warning consumers to watch their wallets.

The businessman, Robert L. Darnall, of Agoura Hills, Calif., has scheduled a third weekly meeting tonight at a hotel in College Park to explain a business venture offered by his company, Platinum Associates Inc.

Platinum says it has a deal in which it can offer what amounts to free Visa or MasterCard credit cards, with a free life insurance policy worth $67,000, which the company says is offered through Aegon USA, the Baltimore-based parent of Monumental Corp.

Further, those who sign up others for this remarkable deal will receive an average of $1,100 per subscriber in commissions and bonuses, according to Platinum's promotional material.

"Don't ask how we can do it," a Platinum brochure says, "just ask how you can participate in what has been called: 'Simply the best money making machine available today -- maybe the best ever!' "

But according to an Aegon statement yesterday, "it has absolutely no relationship or arrangement with Platinum Associates Inc. . . ." Likewise, MasterCard International said it has "no information on any MasterCard member that's working with Platinum," and "therefore we find them in violation" of the association's regulations.

And Visa U.S.A. spokesman Albert Coscia said that "Platinum Associates is neither a Visa member financial institution nor a registered marketing agent of a Visa member." He said Visa's security and fraud control division and its legal division are investigating Platinum.

Maryland officials, including the attorney general's consumer protection division and the consumer credit commissioner's office, said they knew nothing about Platinum or Mr. Darnall.

But his ventures have received decidedly negative reviews in several states.

Hershel Elkins, an official with the California attorney general's office, said that although no complaints have been filed with his office concerning Platinum, the state was aware of what Mr. Elkins called "a very peculiar money-making scheme."

Mr. Elkins' advice to consumers was to "take a very, very long look and check with your department of insurance and insurance agent before you proceed."

The Georgia Office of Consumer Affairs last week issued several cease-and-desist orders against Platinum for alleged violations of Georgia law, including running a "multilevel marketing program," better-known as a "pyramid scheme," according to Barry W. Reid, administrator of the Office of Consumer Affairs in Georgia.

"Basically we've taken the position that it's just another illegal get-rich-quick scheme," Mr. Reid said, adding that as many as 300 people attended a recent Platinum meeting outside of Atlanta, and many of them paid $55 for the right to obtain a "free" credit card and life insurance policy.

At that meeting, a representative of Platinum said Aegon was the insurance company behind the program, Mr. Reid said.

And at a similar meeting in Arizona, Platinum officials handed out a list of about 10 insurers, including Aegon, which it said was backing the plan, an Aegon spokeswoman, Rosemary S. Kostmayer, said yesterday.

Last year, the Washington state attorney general's office sued Mr. Darnall and a company called Excel Exchange Inc.

"We alleged he was operating an illegal chain distribution scheme" that involved an offer of a free house for those who signed up enough subscribers, said Anthony Carter, an investigator with the attorney general's office in Tacoma.

Mr. Darnall admitted the violations and agreed to an injunction preventing him from any further violations in Washington.

Neither Mr. Darnall nor an assistant in California returned calls to Platinum's office yesterday.

A receptionist for Thayer C. Lindauer, whom Platinum's promotional material names as Platinum's legal counsel, said Mr. Lindauer is no longer working for the company.

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