Credit Card Fraud


 

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You get an ad in the mail which states, among other things,

"You have been APPROVED for a $2,500 unsecured credit line from the Financial Card Division of DDQ based on the information we have on file regardless of past credit. Your Approved credit line of $2,500 for credit purchases and cash advances will be available once you receive your CashPlus Card just by calling now."

The ads contain small pictures of a VISA, MasterCard and a CashPlus card on the upper right hand portion.


"YOU ARE APPROVED" FOR A PREMIER CONSUMER CREDIT CARD
$2350.00 Immediate Line of Credit - Guaranteed!!!
Get sponsorship for your very own Master Card - Regardless of your credit situation!!
YOU ARE APPROVED - YOU CANNOT BE TURNED DOWN!!


Excited, and eager to shop, you respond to the ads by calling the telephone number listed. The salespeople there continue to represent that you have been approved to receive a credit card and a $2,500 line of credit regardless of your credit history. You are also informed that you will receive a VISA or MasterCard.

You are asked to pay a $149.95 fee for the credit product, either by having your checking account debited or by charging it to a pre-existing credit card account. After providing the information, your checking account is debited via an unsigned bank draft.

Expecting your new credit card you finally receive a package of materials from DDQ that disclose, for the first time, severe limitations on your ability to use the credit products promised.

You do not receive a major credit card in the package. Instead, you receive a mail-order catalog together with a charge card, good only for ordering items from the catalog. You are informed that you will only receive an application for a major credit card if you first purchase $400 worth of merchandise from the catalog.

The $2,500 line of credit, calculated at extremely high rates of interest, applies only to the use of their "CashPlus" credit card (which is not a general credit card, but a "single-use credit card" which can only be used to purchase items from their catalogues); the cash advance is limited to only $10; and their CashPlus card can not be used in any ATM machines.

After you've ordered the amount required from the catalogue for grossly overpriced, low quality merchandise you find that the sponsorship for a major bank card consists only of a form to request a regular application for a VISA or MasterCard which you must send to a bank along with the good credit history they require.

Old and Poor, You Qualify!

The targeted victims of a similar operation were primarily the elderly who relied on Social Security or fixed retirement incomes for support. The telemarketers would call and say that you had been pre-approved for a low interest debt consolidation loan or a low interest rate credit card.

"Because of your established credit history, you may now be eligible to apply for a new card with a rate as low as 7.9%. Would this be helpful to you, or do you pay your balances in full every month?"

The low interest rates were supposedly guaranteed for five years and you simply needed to pay the agent a fee of between $199 and $499 to receive the loan or pre-approved credit card.

"After consulting our "interest savings chart" we can determine that your annual savings will more than cover the one time activation fee of only $385."

You are further told that they would process all of the required paperwork for you and if you were dissatisfied, there was an absolute money-back guarantee. For your "protection" they pass you on to a verifier who tape record your acceptance of the terms.

"Do you think we would risk losing our status with credit card companies for a few hundred dollars?"

In reality, all you would receive was a blue folder which contained a listing of ten to fifteen institutions that you could apply to for loans or credit cards on your own. The victims of this one scam were, collectively, defrauded out of $2.2 million dollars while the owner of the operation got twelve and a half years worth of prison credit.

A former employee suggests that there are still over 70 of these low interest offices operating in Montreal with one organizer running at least 12 offices, shifting between various locations every few months.

"The leads are recycled on a regular basis, often stamped with the names of other offices, some of which have been promoting bogus Credit Card Protection offers."

These operations find that people having credit problems can be convinced to send their last dollar for loans or credit cards that they will never receive. Don't pay up front unless it's a secured card which requires a deposit to cover any charges made.

Teasers, Not Pleasers

Some companies with low-rate teasers, promising relief from excessive rates, offer to transfer your balance at rates such as 6.9% for six months. Quite often this special rate may be for future "new" charges only, not the transfer. Or the reverse may apply with a high rate on all new purchases, but either way you could be worse off than before if the total new rate is greater, or you increase your credit spending due to a temporary reduction in monthly payments.

Some identity theft scammers will call with a fantastic offer which involves switching credit card companies but is actually a ruse to obtain your credit card info or other personal data for their own unauthorized use.

Secured Credit Cards

ANYONE CAN QUALIFY FOR A MAJOR CREDIT CARD!
Separated? Divorced? Bankrupt? Widowed?
BAD CREDIT? NO CREDIT? NO PROBLEM!
900-555-1111

* Make the call NOW and get the credit you deserve!
* Even if you've been turned down before,
you owe it to yourself and your family.
* Your major credit card is waiting.


Some companies deceptively advertise major credit cards through television, newspapers, and postcards which lead you to believe you can get a card simply by calling the number listed. Sometimes the number is a '900' number service, for which you are billed just for making the call.

Ads like this promoting secured credit cards may appeal to you if you have a poor credit history or no credit at all. And while secured credit cards can be an effective way to build or re-establish your credit history, some marketers make deceptive advertising claims to entice you to respond to their ads.

Both secured and unsecured cards can be used to pay for goods and services. However, a secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured, or more standard, card does not. Typically, a secured card requires an annual fee and has a higher interest rate charge than an unsecured card.

Your credit line is then a percentage of your deposit, typically 50-100%, which may range from a few hundred to several thousand dollars. In addition, you also may have to pay application and processing fees sometimes totaling hundreds of dollars.

Don't Just Spend, But Earn As Well

"$5,000 unsecured credit card, 6.95% rate, GUARANTEED APPROVAL
regardless of your credit history
(bankruptcies and foreclosures okay)."


When you receive an e-mail that offers you a "major" credit card regardless of your credit history it can be hard to resist. The offer may claim that the card will be issued by an "offshore" bank, and that nobody is turned down. It also may offer a "business opportunity" that promises astounding earnings.

A variety of such schemes have defrauded more than ten thousand consumers nationwide doing business under a series of assumed names, promising consumers that in return for the payment of a fee in advance, they will receive a major credit card with a high credit limit. Sometimes they are combined with pyramid schemes, which offer you an opportunity to make phenomenal amounts of easy money simply by attracting new participants to the scheme.
 

Partial segments courtesy of  Crimes of Persuasion: Schemes, scams, frauds.
 


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