Deceptive Credit Card Applications Targeted by Law Enforcement

Credit card applications have become so scarce in Americans' mailboxes that just about any kind of "pre-approved" offer can get consumers' attention. Law enforcement officials in Oregon and in the District of Columbia recently cracked down on a firm that promised access to easy credit in exchange for hefty processing fees.

Investigators charged the company with fraud after consumers complained about "bait and switch" tactics designed to appeal to subprime borrowers. Instead of a credit card, applicants discovered they had entered a contract with a private catalog company that failed to report account information to major credit bureaus.

Representatives from the Federal Trade Commission reminded consumers to watch out for unsolicited credit card offers that seem too good to be true, especially during an economy when most legitimate lenders have scaled back pre-approved application promotions. Many banks offer secured credit card programs and other "second chance" lending products with deposit requirements smaller than the $395 in fees charged by the company under investigation.