ultiple recent Federal Trade Commission (FTC) actions reveal that bogus credit card offers are still a popular form of fraud plaguing the American consumer. People with tarnished credit histories eager to rebuild good credit are particularly likely to be targeted by these scams, which promise a major credit card for an advance fee. If the card comes at all, it's a far cry from what was promised. Both of these actions are so recent that no actual trials have yet taken place. The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or a ruling that the defendant actually has violated the law. The cases will be decided in court.
		n January the FTC and Illinois Attorney General Jim Ryan filed suit against a group of Illinois residents who allegedly scammed tens of thousands of consumers nationwide with a postcard that promised a credit card with a high credit limit, and gave a toll-free number to call for more information. According the complaint filed against the defendants in this case, here's how the scam allegedly worked: When consumers called the toll-free number, they were promised a Visa or MasterCard if they would approve a $97.50 "processing fee" to be deducted from their checking accounts. In some cases, the fee was $147.50. But rather than receiving a major credit card, they received a "Consumer Express" card that could only be used to order from the defendants' own mail-order catalog of high-priced specialty items. In order to be "sponsored" on an application for a credit card, they had to buy at least $400 of merchandise from the catalog. The defendants in the case allegedly used various business names, including Premier Card Services, Creative Concepts, Prime Credit Services, Tower Financial Services, Colonial Financial Services, Consumer Express and several variations of those names. The suit was filed in conjunction with an FTC program called "Operation Loan Shark," which targets telemarketers engaged in advance-fee loan scams including advance-fee card scams.
		he FTC shut down a different kind of credit card scam in November of last year. With a federal court order the FTC halted the operations of an organization that advertised an income of up to $18,000 a month and preapproved, unsecured Visas or MasterCards for an "investment" of $130 and monthly payments of $30. Doing business as Credit Development International (CDI) and Drivers Seat Network, the defendants in this case allegedly marketed their pyramid scheme at recruitment seminars and sales and training meetings across the country. There they distributed promotional materials and advice for encouraging others to join the scheme. In a high-tech twist, many members of the scheme allegedly employed the Internet to promote it, sending out unsolicited email or "spam" extolling the benefits of "investing." According to the complaint filed in U.S. District Court for the Central District of California, in Los Angeles, consumers who signed up for the pyramid were deceived by both the promise of monthly income and the promise of high-limit credit cards, neither of which were truthful.
		n both of these cases, one of the key alleged violations is the advance fee that the scammer requires before processing or enrolling the consumer. Like credit repair companies, telemarketers offering loans or credit cards cannot legally charge a fee before the promised service has been delivered. But in 1996, advance-fee loans and credit card offers were among the top five fraud complaint categories according to the National Fraud Information Center, a project of the National Consumers League. And as the recent FTC actions demonstrate, the schemes keep on coming.
				If anyone tells you they can get you a credit card, but need you to pay the processing fee first, don't sign up, no matter how good the card sounds--it's a scam.
				If you receive a postcard, email, or telephone call offering you a credit card that seems otherwise out of your reach, be suspicious. No legitimate card issuer will extend a high-limit card to someone with a poor credit rating, or offer credit without running a credit check. As tempting as the offer may seem, make sure you understand all the details before you sign up.
				If you believe you have been victimized by fraud like this--or any other telemarketing fraud--contact your State Attorney General or local consumer affairs department, the National Fraud Information Center, a project of the national Consumers League, at 1 (800) 876-7060, and the Federal Trade Commission at (202) 326-3128. You may never see your money again, but at least you can help put an end to the scam.
				Seek out legitimate information about the huge variety of credit cards available to consumers. Many banks offer secured cards to help even people with credit troubles establish a better payment history. Try the Bank Rate Monitor web site as a source for credit card information (http://www.bankrate.com).
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