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CONSUMERS SEEKING LOANS GOT PHONE BILLS INSTEAD, PREATE ALLEGES

 CONSUMERS SEEKING LOANS GOT PHONE BILLS INSTEAD, PREATE ALLEGES
 HARRISBURG, Pa., April 30 /PRNewswire/ -- Pennsylvania consumers who tried to get loans through a Mississippi-based financial service didn't get the loans -- but they did get stuck with phone bills of up to $80, Attorney General Ernie Preate Jr. charged today.
 A suit filed by Preate's Bureau of Consumer Protection alleges that Delta Financial Service Inc. of Jackson, Miss., didn't live up to its advertised promise to get loans for consumers.
 "While Pennsylvania consumers were charged more than $77,000 for phone calls to place loan applications with Delta, to our knowledge no Pennsylvanian obtained a loan through Delta," Preate said.
 "This case points out once again that consumers should be wary of loan broker services that promise to secure loans regardless of the consumer's credit history."
 Preate said Delta ran television advertisements throughout Pennsylvania soliciting consumers to call Delta for help in getting loans from $1,000 to $200,000.
 According to the suit, the ads made claims such as "We've got the sources who have the money to lend...and they'll make loans where others won't."
 Consumers who called a toll-free "800" number provided in the ad heard a recorded message stating that Delta could obtain loans for consumers even if they had financial difficulties and couldn't receive loans elsewhere, the suit alleges.
 The message also told consumers the only way to submit a loan application was to dial one of the defendant's "900" numbers, according to the suit.
 "Consumers who made these calls allegedly were billed $3.95 per minute while they talked with Delta employees who purportedly were taking loan application information," Preate said. "The cost of the phone calls generally ranged from $50 to $80, according to our investigation."
 The suit alleges that a few weeks after their contact with the defendant, consumers received letters advising them that Delta was unable to secure a loan for them.
 "Delta has been unable or unwilling to provide my office with any evidence that it obtained loans -- or even attempted to obtain loans -- for Pennsylvania consumers," the attorney general said.
 The suit alleges that Pennsylvanians were billed $77,293 for calls placed to Delta's "900" numbers. Preate said his office estimated that 1,200 to 1,500 Pennsylvania consumers are affected.
 Preate's suit was filed in Cambria County Common Pleas Court by Deputy Attorney General E. Barry Creany, attorney-in-charge of the Bureau of Consumer Protection's Ebensburg office.
 Creany said that after the bureau mediated one consumer complaint against the defendant, Delta allegedly sent the consumer a refund check that bounced.
 The suit asks the court to freeze any money in Delta's AT&T account and to order the defendant to pay consumer restitution, civil penalties and costs.
 Creany said Delta Financial Services Inc. also has done business under the name Delta American Financial Services Inc. from a post office box address in Ridgeland, Miss.
 /delval/
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 /CONTACT: Jack J. Lewis of the Office of Attorney General, 717-787-5211, or at home, 717-657-9840/ CO: Pennsylvania Attorney General's Office ST: Pennsylvania IN: SU:


MP -- PH007 -- 4860 04/30/92 11:02 EDT
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Publication:PR Newswire
Date:Apr 30, 1992
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