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Financial Fraud Law

Company Settles Charges that It Targeted Union Members with False Credit Offers

 Union Workers Credit Services, Inc. (UWCS), and its president, Joe Malazzo, have settled charges that they targeted union members with false credit offers. Under the settlement, the company is permanently banned from offering credit or financial services or products in New York.

The settlement also requires UWCS to provide full refunds to those who paid fees based on the allegedly deceptive advertisements and to pay $50,000 in penalties, costs and fees.

According to New York authorities, UWCS targeted union members with deceptive advertisements that appeared to offer “Platinum” credit cards with a $10,000 credit limit in return for a $37 fee. Consumers who paid the fee did not receive a credit card, but rather, a line of credit that could be used only to purchase items from a catalog of merchandise offered by the company, the government said. 

“Targeting hardworking union members with false credit offers in these tough times is a shameful practice we refuse to tolerate in New York,” said Attorney General Eric T. Schneiderman. The settlement “will give restitution to every New Yorker who fell victim to this scam and ensure that no one else is exposed to this deceptive scheme. I encourage New Yorkers who were deceived to contact UWCS for a refund.”

New York previously had sued UWCS, based in Dallas, Texas, and Malazzo, alleging that it had determined that the company had targeted financially vulnerable consumers, including union members, with direct-mail solicitations and internet advertisements that purported to offer a general-use credit card, when in fact the credit could be used only to make purchases from UWCS’s catalogue. According to New York authorities, the advertisements also created the false impression that the company was affiliated with labor unions. As alleged, some of these solicitations displayed pictures of workers who appeared to be members of labor unions, prompted consumers to select their union from a dropdown menu on the company’s online application, and displayed a statement at the top of the user’s web browser that stated, “Union Workers Credit Services—providing credit services to the Union Workers of America.” Consumers also reported difficulty obtaining refunds, the government asserted. Consumers in cities across New York State, including Long Island, Buffalo, Ithaca and Rochester, received the deceptive solicitations, according to the government.

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