Couple almost loses cash in loan-consolidation scam

Gazette, The (Colorado Springs), Jun 10, 2004 by WAYNE HEILMAN THE GAZETTE

Colorado Springs car dealership employee Billy Gonzales nearly lost $984 in a lending scam from a bogus credit union, but his wife's fears about the deal allowed the couple to dodge the bullet.

Gonzales had sent the money by wire transfer to a Toronto Western Union office to buy an insurance policy backing a $5,000 loan to consolidate his debts. He had responded to an advertisement for Heartland Credit Union published in several Colorado newspapers, including The Gazette.

His wife canceled the transfer and got the money back after she grew suspicious of the deal and called the Better Business Bureau of Southern Colorado.

The agency told her the credit union doesn't exist and advised her to cancel the wire transfer to avoid losing the money.

Advertisements for Heartland have been published in at least 13 states, according to the Credit Union Journal, an industry publication. The ads target consumers who are deeply in debt or have bad credit and list a toll-free telephone number to call.

The group that placed the ads is not affiliated with any of the several U.S. and Canadian credit unions operating under the Heartland name. The local BBB said similar advertisements were placed last year in Colorado under the name Century Credit Union.

The Springs BBB warns that lenders cannot require Colorado borrowers to pay an advance fee; such fees are illegal in Colorado and many other states.

David Paul, Colorado's financial services commissioner, said credit unions must be chartered by the National Credit Union Administration or a state agency to operate in Colorado. Consumers can check on any credit union by calling his office at 1-303-894- 2336.

Paul said at least one other consumer has filed a complaint with his office about Heartland and cautioned consumers against using out- of-state credit unions that do not list a local office. He said most credit unions serve a specific community or group of companies.

The Web site of the Credit Union National Association, a Madison, Wis.-based trade group, reported Wednesday that Canadian authorities had arrested two people in connection to the Heartland scam.

The two were released on bond, however, and later could not be located.

Toronto police would not confirm the arrests late Wednesday.

CONTACT THE WRITER: 636-0234 or wayneh@gazette.com