Michigan fraudster pretending to be CU is closed

LANSING, Mich. (4/10/09)—The Michigan Office of Financial and Insurance Regulation (OFIR) has slapped a cease-and-desist order on an entity claiming to be a Pennsylvania-based credit union, but which the regulator believes to be a bad actor stealing both money and identities.

OFIR alleges that "Firststar CU" is a fraudulent financial institution, which advertised in Michigan newspapers and encouraged customers to apply for loans by providing upfront payments and personal information. It also advertised via a website, which was shut down after OFIR contacted the Web host.

The state regulator urged consumers to have personal contact with a financial institution before entering into a business contract. It also recommended that consumers with questions could verify the identity of credit unions, banks and thrifts, through state or federal regulators.

The Firststar case represents the second time in less than a month that Michigan's credit union regulator has issued a cease-and-desist order against a fake online credit union. In March, OFIR discovered a bogus credit union called Communal CU of Dearborn after consumers complained about its website.

OFIR said that scam artists were promoting the fake credit union on the Internet to consumers looking for a break on a loan or wanting to refinance their mortgage. Consumers told OFIR they were asked to provide two pay stubs, Social Security numbers and bank account numbers, information that could be used for identity theft and unauthorized access to financial and card accounts.

courtesy of cuna.org