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 Victimized

Yes, 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?

For starters, a mailed offer and customer agreement should mention the actual name and address of the chartered depository institution taking the deposits. Then, you or a friend or family member willing to do a little extra research can then go to the Federal Deposit Insurance Corp. Web site and search for the institution's call report or thrift financial report, by clicking here.

Follow that link and, for report type, select "Call/TFR." Then type the institution's name to search for it. If no report comes up, and we are in the middle of the quarterly cycle when banks file their financial information with regulators, you may need to go back a quarter when selecting the report date.

The call report includes the bank's address right at the top.

The credit card offer should also include a customer service phone number. Call them and speak with a representative, to make sure you know which bank is involved. If they don't provide a customer service phone number, they are already making things difficult. Take your business elsewhere.

A Secured Card Can Be a Great Thing

Secured credit cards are excellent tools to help consumers quickly improve their credit scores. Having a low credit score won't keep you from getting a mortgage loan -- assuming you have the cash for a down payment and can prove sufficient income to afford the loan -- but you will be offered a much higher interest rate than a borrower with a relatively high credit score.

The same is true for auto loans. You'll get a loan, but your rate may be in the high double digits, if you have a very low credit score.

With the commitment of a relatively small deposit, and an agreement to pay an annual fee, you can easily get a secured credit card, while building a real credit history almost immediately, with payments reported to the three major credit agencies. And after a year of on-time payments, you could get your deposit back, even if you are running a balance on the card. You can also get your deposit back at any time if you pay the card balance down to zero and close your account.

So what's a safe way to go about getting a secured credit card?

A great way to start is to visit your bank. Don't have a bank? Visit your credit union. Don't have a bank or credit union? Get one. Yes, you already know this, but it is possible that a less-informed friend of family member does not -- there are still banks and credit unions offering no-fee checking accounts, regardless of the minimum balance you keep, and you pay a whole lot less for services then you would by going to a check-casher.

And if your pay is directly deposited into a bank, you have instant access to your money.

Getting back to the secured credit cards, if your bank or credit union can't help you with one, there are many banks that can.

You could consider the bank that was unfairly associated with the phony "Freedom 1st National Bank."

Credit One Bank, N.A., offers secured credit cards through direct mail offers and also through their Web site. The bank provided plenty of customer service phone numbers. You can go to the Web site and consider the various secured credit card offers, and it is a very good idea to phone them as well, to have all your questions answered.

Credit One Bank's secured credit cards have minimum opening credit lines and deposit requirements of $300 to $500, with a $75 fee for the first year, and annual fees $99 thereafter. Of course, your objective should be to restore decent enough credit relatively quickly, in order to obtain a non-secured credit card and avoid future fees.

Bank of America (BAC) offers secured Visa (V) credit cards with a competitive annual fee of $39, and balances ranging from $300 to $4,900. The products are described on Bank of America's Web site, and the bank clearly states "After 12 months, you may qualify to have your security deposit returned while you continue to use your card."

That's an excellent "fresh start" and could lead to other benefits if you build multiple relationships with the bank. For example, if you already have an account with Bank of America, you may qualify for a much lower auto loan rate than you would otherwise be offered, even if the loan is made through a car dealer.

You can find more information on Bank of America's secured credit card offers here.

Beware that like all credit cards, the secured cards have very high transaction fees for cash advances and other special transactions. They are very clearly spelled out in the disclosures.

Capital One (COF) offers a secured MasterCard (MA) with a relatively low annual fee of $29, with a required "$49, $99 or $200 refundable deposit based on your creditworthiness." Available secured credit lines range up to $3,000.

Wells Fargo (WFC) offers a secured credit card with an even lower annual fee of $25. Deposit and credit lines range up to $10,000.

If you are looking to rebuild your credit score and can afford to make a deposit to get a secured credit card, it is worth calling around and learning about the differences between the available offers, to select the one that is best for you.

-- Written by Philip van Doorn in Jupiter, Fla.