Old 'guaranteed' credit card scam
resurfaces with elderly as targets
By Libby Wells • Bankrate.com

"A billion dollars in credit ... and nobody applying for it!" screams an advertisement guaranteeing approval for a charge card with a super-low fixed interest rate.

Unfortunately, there are people applying, and some of them are paying big bucks to do so -- only to find that the forms are phony and the promises empty.

It's an old scam that has resurfaced, and the victims are elderly people and folks with poor credit.

"This has happened a lot over the last five years," says Judy Brown, senior vice president of Pulaski Bank and Trust in Little Rock, Ark. "It seems like it kinda goes in cycles."

Brown has been getting calls lately from people in Delaware, Tennessee, Texas and other states who paid for a packet of credit card applications from various banks after receiving sales calls from Y2K Credit Solutions Inc.

Copied applications looked real
The applications turned out to be copies, but some of them looked so real that Brown says the bank processed them. "They were declined, and some of the people called to ask why because they had been told they were guaranteed a credit card," she says.

"But we only approve 20 to 25 percent of applications that come in here because our underwriting standards are so strict," she says. "We're very conservative."

The Mountain States Better Business Bureau in Colorado started receiving complaints about Y2K Credit Solutions in February and alerted its members, as well as the attorney general in Wyoming, where the company has a P.O. box.

The BBB said Y2K is selling the credit applications for $15, plus $4.95 for shipping and handling, payable by money order or cashier's check.

But apparently some people are getting swindled for a lot more.

"One woman said she had paid $380 to get a packet of low-rate credit card offers," says Brown. "She gave them her checking account number so they could debit her account."

Most victims were elderly
Brown said most of the victims were elderly. "I hate it that these consumers are getting ripped off," she says. "And it makes the bank look bad."

Y2K Credit's print advertisement lists a phone number with an area code in Alberta, Canada, that is "either invalid or has been changed," a phone company recording says. The 800 number on the company's letterhead is answered by a recorded message that requests the caller's name, address and phone number.

Holly Anderson, spokeswoman for the National Consumers League, says many fraudulent telemarketers set up base in Canada.

"We find a lot of the advance-fee loan scams come out of there," she says. "That's because it's harder to prosecute across the border."

Upfront fees should send up a red flag
Bogus credit card offers that require upfront fees is one of the most common telemarketing cons.

Many people are duped because the callers are cunning. "They're effective and they're pushy," says Anderson. "They know how to make people feel good."

She advises folks who are considering card offers from telemarketers to first check with their local Better Business Bureau and the National Consumer League's National Fraud Information Center for reports on the company.

Regardless, requests for money in advance should raise a red flag for consumers.

"It's a scam if anybody is asking for money upfront," Anderson says. "The one exception to that is a secured card. If they are a legitimate company, they will charge it to the credit card."

-- Posted: April 3, 2000