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This is a variation of the advanced fee scam which targets persons with poor credit histories or other financial problems.
Due to poor credit or other reasons, many people have problems obtaining major credit cards. The phony credit card scam is directed toward such persons. Although some of these offers may initially sound legitimate, these schemes can cost the victims a lot of money and the credit card allegedly being offered will never be obtained.
In these scams, the intended victim receives a call from a solicitor claiming that for a fee (usually $25 - $75) he or she can get you a "pre-approved" major credit card, usually VISA or MasterCard, or, for a fee, can establish that you are credit-worthy enough to be issued such a card.
Usually, these fraudsters will state that the card can be obtained without a credit check.
After the victim pays the fee, a card may actually be received, but rather than a regular major credit card, it is a single-use credit card--that is a card that can only be used to purchase goods from one source, a business owned by the issuer of the card.
In other words, the card received is not the standard credit card which can be used at any business, but a card which can only be used to buy products from the issuer of the card--usually a catalog sales operation offering substandard or overpriced goods.
In other cases, victims who pay this fee just receive a list of banks that issue credit cards, perhaps along with instructions on how to apply. However, they do not get the credit card promised by the caller who obtained the advance fee.
It should be obvious that no legitimate credit card firm would be offering "pre-approved" credit cards to persons who might be considered bad risks--at least without a credit report being obtained. However, persons who have a poor credit history or other financial problems usually have no problem obtaining Debit cards from legitimate banks. In these cases, the consumer deposits funds into the account and the funds are deducted from the account as the Debit card transactions occur.
The Better Business Bureau offers the following tips in regard to such offers:
Legitimate card issuers never "guarantee" a card before you apply, especially if you have bad credit, no credit or a bankruptcy.
It is a common practice for some card issuers to ask that you deposit money in their bank to "secure" the card, but not demand a payment for a "processing fee" or for "credit card protection" coverage.
Never give your bank account or Social Security numbers over the telephone to an unfamiliar company.
If you do not have the offer in hand and you are asked to pay, hang up. It is a scam and is against the law.
If you believe you are a victim of this type of advance fee credit card scam, you may want to call your local Better Business Bureau, or file an online complaint form with the BBB.
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