the disappearing credit union
Is that really a credit union granting you a loan -- or are
you about to send money to a con artist?
The Credit Union National Association (CUNA)
says that companies posing as credit unions are placing advertisements
in local newspapers inviting consumers to take out a loan.
When a consumer sends the money, it disappears -- and so does
the credit union.
Dan Mica, CUNA president and CEO has asked U.S.
Attorney General John Ashcroft and the Federal Trade Commission
to step in and help before the problem gets any worse.
"Over the last year, we have observed
a growing number of instances in which advertisements have
been run in newspapers for nonexistent 'credit unions,'"
writes Mica in a letter to Ashcroft.
"These organizations appear to be
trading on the trust earned by legitimate credit unions over
many decades of service in the marketplace to encourage ordinary
citizens to send funds, which then disappear."
Mica says these advertisements have been spotted
in newspapers across the nation in states such as Alaska,
California, Colorado, Indiana, Michigan, Missouri, North Carolina,
Ohio, Pennsylvania, Rhode Island, Utah, Wisconsin and Washington.
The Federal Deposit Insurance Corporation recently
released a warning about a similar
con -- ads for bogus bank loans, which were placed in
small or community newspapers.
"On face value, you would not know there
was anything out of the ordinary," says FDIC spokesman
The ads look real because they use the logos
of real banks -- but with different contact information. The
numbers in these ads were traced to prepaid cell phones purchased
Beware any request to
In an example provided by Mica, one of the credit union ads
used the made-up name of First Rate Credit Union with the
logo of the National Credit Union Administration. Consumers
who called the number in the ad were told to wire $1,500 to
an address in Canada through Western Union.
The FDIC warns that you should be suspicious
of any bank that requests you to wire money outside of the
banking system or to what the scammers are calling a "third-party
"Banks tend to offer consumer loans directly.
If you are asked to wire money outside of the bank or outside
of the country, that should raise some red flags," says
Aside from losing their money, consumers who
provide the scammers with personal information, such as their
Social Security number and bank account information, are at
risk for identity theft.
If you think you may be a victim of this scam,
you should file a complaint with the Federal
Trade Commission and contact
one of the credit bureaus to request a fraud alert be
placed on your credit report.
According to the FDIC, the scammers are communicating
with the newspapers through prepaid cell phones purchased
in Canada. This scam sounds remarkably similar to another
advance loan scam being run out of Canada.
Here are more of the
latest tricks scammers use to steal your cash and your identity: