Regulators say First Star perpetuated loan scam
A self-described credit union that advertised personal loans nationwide was not registered as a lending institution and gave a phony address, according to Pennsylvania and Michigan banking regulators.
First Star Credit Union, which advertised in the Los Angeles Times and other newspapers this month, referred consumers to a toll-free phone number and a website for information on getting a loan.
The company operating the website, which listed a York, Pa., address for the institution, was perpetuating “an apparent advance fee loan scam” and that there was no such credit union chartered by state or federal regulators, the Pennsylvania Department of Banking said in a statement.
Consumers had complained to the agency that they had been asked by First Star to pay several hundred dollars in upfront fees for loans.
The listed address is actually that of a shopping mall, whose online directory lists neither a bank nor a credit union.
The Times pulled the ad, which ran in its Monday and Tuesday editions, after receiving a complaint from a reader who could not access the First Star website and discovered negative consumer comments about the company posted online.
The Times’ advertising department “verified that the website was not working and the phone was not working,” newspaper spokesman John Conroy said.
The domain registration firm that handled the website had already taken it off line after receiving complaints, according to the Michigan’s Office of Financial and Insurance Regulation, which also investigated the company.
Conroy said The Times would not publish any additional ads from the company.
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david.colker@latimes.com
