North Carolina State Employee's Credit Union (NCSECU) alerted customers this week that Zeek Rewards, operated by Rex Venture Group, LLC, was a fraudulent scheme. The company is reportedly scrambling to manage the fallout from these direct warnings.
The credit union directly contacted at least two customers. One Zeek affiliate reported NCSECU called his wife after her money order transaction, specifically warning her about Rex Venture Group.
The wife questioned the bank employee, who cited Zeek Rewards' 1099 filings and compliance testing as proof it was not a pyramid scheme. The employee later admitted she did not understand Zeek Rewards' operations.
A second NCSECU customer received similar fraud warnings. The credit union reportedly sent a letter about Rex Venture Group's fraudulent nature. The affiliate who initially reported the calls posted about the incident on Zeek Rewards' Facebook page Thursday, but the post was later removed.
NCSECU, a not-for-profit financial cooperative founded in 1937, is based in Lexington, the same city where Zeek Rewards operates. It serves 1.7 million members, managing nearly $25 billion in assets across 242 branches and over 1,100 ATMs.
Such direct warnings from an established financial institution drew attention. A reader contacted NCSECU to ask if the credit union considered Zeek Rewards a massive Ponzi scheme.
NCSECU responded directly: "Thank you for your inquiry. That is the latest information we have about Zeek Rewards. Thank you."
The credit union's reply confirmed the warning was current information on file. It did not deny the Ponzi scheme characterization. NCSECU did not explain the source of this information or the criteria used for its conclusion.
These warnings coincided with claims from Keith Laggos, a former paid consultant for Zeek Rewards. Laggos stated the FTC had sent letters to the big four banks, advising against opening accounts for penny auction companies.
NCSECU later told the initial affiliate it had received an email about the situation. The source of that email remains unidentified. The credit union has not publicly detailed who provided the fraud alert or on what basis it determined Zeek Rewards was operating illegally.