Scam alert: Fraudulent secured credit card offers

Two companies, Universal Card Services and Universal MasterCard, have agreed to a $900,000 settlement with the Federal Trade Commission for an advanced-fee credit card scam:

Through cold calls and advertisements on television, radio, and the Internet, the FTC's complaint stated, the defendants offered guaranteed, pre-approved cards with a credit limit up to $2,500, regardless of credit history and without a credit check, for an advance fee ranging from $99 to $200. According to the complaint, consumers who paid the fee did not receive a credit card. Some of them received a "stored value" card – a reloadable prepaid card rather than an extension of credit – while others received nothing, or instructions on how to obtain the stored value card.

This type of credit card marketing fraud is fairly common. Fraudsters often prey on people with credit problems by offering secured credit cards or pre-approved credit cards if the consumer pays a fee. After this money is sent in, the consumer never hears back and is never sent the credit card they were promised. If you have been a victim of this scam, it is important to report it to the FTC.

To avoid these scams, never accept a credit card offer that you receive over the phone.  If you are interested in an offer made by phone, ask the company to mail you information about the program and conduct some research before you apply. They best way to open a secured credit card or credit card that accepts borrowers with bad credit is to search online for authentic programs. Be sure to read all the terms and compare offers before you apply. These cards can be expensive, but are often a good solution for customers trying to rebuild their credit. 

Comments

[Darlene]

From my own recent personal experience with attempting to secure a personal loan online, a very large percentage of the online offers are inaccurate and in some cases fraudulent. I will never use online services to get a personal loan or any other kind of loan. I was extremely concerned about just how many companies claim to offer bad credit offers, and bad credit personal loans. In that process between December and January also caused several foreign companies doing loan scams to contact me and try to get me to send them upfront "insurance" fees of from $500 to $1,000 before they could process a loan for say $5,000 with a purported low interest rate. They were totally fraudulent.

Mail scams are also very prevalent. Through my online searches, a California company (actually two companies) they were actually the same company using the same address, but different office numbers and different phone numbers in Venice, California. Somehow that/those companies got my address and mailed me advance fee loan forms … both of these named companies have "F" ratings with their local BBB and I have filed complaints on them both.

It's really sad that I was so vulnerable to these con artists. I've learned my lesson the hard way. I recently had three charges to my checking account that are fraudulent. My bank is investigating. One was a charge for AIR Asia… I'm sure these attributed to my online searches. Sad isn't it?