A scam being operated through an imaginary bank is being used to steal money from consumers seeking to rebuild their credit ratings by signing up for secured credit cards.

The Office of the Comptroller of the Currency on Friday in a letter directed to all executives of U.S. banks, as well as federal and state regulators warned that "entitled Freedom Gold Club is claiming to be associated with a national bank named Freedom 1st National Bank," which doesn't even exist.

The OCC is the primary regulator of nationally chartered U.S. banks and savings and loan associations.

The regulator said "Freedom 1st National Bank is a fictitious entity used as part of a scheme that involves soliciting consumers for semi-secured credit cards through the U.S. mail."

The fake bank targets consumers through direct mail offers of semi-secured credit cards, with customers required to make deposits of $500 to $900.

Legitimate secured credit cards do indeed require customers to make deposits, and in return provide actual credit lines, helping customers rebuild credit scores. Customers can eventually withdraw their deposits after their credit scores improve, or they can simply pay their credit balances to zero, close the accounts and get their deposits back.

But in the case of "Freedom 1st National Bank," consumers have been sending in checks and signing program agreements, only to see their deposits disappear.

"The checks are cashed by an individual using the name of Bradford C. Ege II, and the victims never receive the anticipated credit card," the OCC said.

The phony "Freedom 1st National Bank" has also been claiming to be affiliated with a real bank, Credit One Bank, N.A., of Las Vegas, which offers credit cards and is regulated by the OCC. The regulator took pains to make clear that "Credit One Bank, N.A., has no connection" with the "Freedom 1st National Bank" scam.

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