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CUISPA alerts CUs to new-online-account loan frauds
WASHINGTON (1/15/10)--The Credit Union Information Security Professionals Association (CUISPA) is warning credit unions to be cautious of personal loan applications from accounts opened online. A fraud ring has attempted scams at dozens of credit unions nationwide, in which persons with Eastern European names--possibly Russian immigrants from Armenia--are opening accounts through online account-opening systems to obtain personal loans, auto loans, credit cards and/or educational loans. Once the loans are obtained, they default with either no first payment or after a few minimum payments. They are also performing credit card “bust outs”--including mailing fraudulent/nonsufficient funds checks to use the additional credit immediately available when the check is received. The scam appears to be coordinated among a group of individuals in Eastern Europe. Loans are made against cars purchased, documents notarized and tax returns prepared all in various Eastern European names. CUISPA also warned that several of the identified names have had credit inquiries from known credit unions listed on their credit reports. Of note--the persons applying are true persons--their personal information checks out. They also claim to be U.S. citizens, but may not speak English or have a Social Security number issued within the past few years. They answer the “U.S. Citizen?” question on loan applications, with a “yes” to secure the loan. Usually, the person’s last name ends with a “yan” (for example: Gahzaryan, Arshakyan). Individuals may use an interpreter when calling, or respond only via e-mail. Most live in the Los Angeles area: Van Nuys, West Hollywood, Glendale or Pasadena, Calif. Some live in Las Vegas. Missouri and Colorado also are being reported as possible problem areas, said CUISPA. Some fraudsters are legitimately employed, while others may claim to work for a company that is a paper entity. The U.S. Secret Service is forming an Armenian/Russian Mob Task force. At this point, it is collecting data to determine if the task force has enough to warrant a substantial case. About two dozen credit unions have confirmed cases of similar activity incurring losses. All cases are being referred to the Secret Service. CUISPA strongly encourages credit unions to file suspicious activity reports and inform CUISPA to assist the Secret Service in developing the case. For more information, use the link.
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