NEW YORK ( TheStreet) -- A bank scam the Office of the Comptroller of the Currency warned about on Friday illustrates how scary it can be out there, but consumers can easily avoid this type of trap by doing a little homework.
The OCC -- the primary regulatory for nationally chartered commercial banks -- on Friday said "an entity entitled Freedom Gold Club is claiming to be associated with a national bank named Freedom 1st National Bank. Freedom 1st National Bank is not authorized by the OCC pursuant to federal law to conduct business as a national bank."
According to the regulator, "Freedom 1st National Bank is a fictitious entity used as part of a scheme that involves soliciting consumers for semi-secured credit cards through the U.S. mail."
The fake bank targets consumers through direct mail offers of semi-secured credit cards, with customers required to make deposits of $500 to $900.The fake bank claimed to be affiliated with a real bank, Credit One Bank, N.A., of Las Vegas, which legitimately offers credit cards and is regulated by the OCC. But new customers signing agreements and sending deposits to "Freedom 1st National Bank," have had a less-than-satisfactory customer service experience. The deposits have disappeared. "The checks are cashed by an individual using the name of Bradford C. Ege II, and the victims never receive the anticipated credit card," according to the OCC said.
Various Ways to Avoid Being VictimizedYes, you've been warned. But has everyone you know been adequately warned? It's pretty simple -- don't respond to any offer over the phone or in the mail, for any service of any kind, unless you really know who you're dealing with. Yes, one can get a bit cynical. After all, if a stranger approaches you or calls you, it is generally because they want you to give them money. And if a stranger approaches you or calls you offering to give you money, it is too good to be true. Period. Yes, you know this already. But you also know people who don't know this. How can you tell if a company claiming to be a bank, is really a bank?
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV