Authorities Close In On Phony CU Scammers
TORONTO-As The Credit Union Journal was going to press, Canadian law enforcement officials were expecting to issue arrest warrants for numerous suspects they believe are responsible for the phony credit union scam that has been advertised in at least a dozen states over the past year.
No arrests have been made yet in the case, known as Heartland CU or America's Choice CU, but Canadian authorities believe the scam is the work of organized crime tied closely to gun and drug trafficking, according to Helen Szerniak, an officer with the Ontario Ministry of Consumer and Business Services, which is investigating the case.
The group is believed to be operating a sophisticated boiler room with individuals bilking victims in Canada and the U.S. of as much as $10,000 a day for each perpetrator through advanced fee, debt consolidation and identity theft schemes. "This is a huge organized crime group. We've been chasing all of these guys for 10 years," Szerniak told The Credit Union Journal.
The group has not only used the name of legitimate U.S. credit unions, but large banks, like Wells Fargo, Citibank, and major insurance companies, to further their scheme, she said. Canadian officials have been working with U.S. law enforcement on the case in a cross-border telemarketing task force.
Fed Won't Issue Rules On 'Bounce Protection'
WASHINGTON-The Federal Reserve said this week it won't issue new rules to regulate overdraft, or 'bounce' protection, despite calls to do so by consumer groups.
The program allows consumers with low balances to overdraw their accounts in exchange for fees that consumer groups claim amount to high-cost loans. After studying the issue for a year, the Fed said it will not apply the Truth-In-Lending laws to such programs, which would have required broad disclosures on fees. Consumer groups charge the programs, generally used by low- and moderate-income consumers, amount to high-charge loans because a fee of $15 to $35 for a two-week overdraft of $100 is often equal for an annual interest rate of as much as 500%.
Hawaii FCU Among 1st To Offer Plastic Version of AmEx Travelers Checks
HONOLULU-Hawaii FCU has become one of the first financial institutions to offer a plastic version of American Express' popular travelers checks.
The newly introduced TravelFunds card is a stored-value card that is being offered to members of the American Association of Retired Persons (AARP) through the credit union.
The cards can be used at stores and at ATMs worldwide, wherever American Express is accepted.
