Generally, advance fee loan web sites require victims to complete loan applications requesting personal information, such as bank account and Social Security numbers. Victims are told they’re approved for loans and just need to pay advance fees, sometimes referred to as a deposit or insurance, ranging up to thousands of dollars. Those who pay never get the promised loans and are sometimes tricked into giving the scammers even more money.
BBB advises you beware of the following red flags of advance fee lenders:
Requesting upfront fees. Legitimate lenders often charge application, appraisal or credit report fees. However, they disclose their fees clearly and prominently; they take their fees from the amount you borrow; and the fees usually are paid to the lender or broker after the loan is approved.
Unwilling to provide contact information. Companies refusing to provide contact information, including physical addresses and phone numbers, may be trying to avoid law enforcement detection.
Guaranteeing loans regardless of credit history. Legitimate lenders never guarantee or say you're likely to get a loan before you apply, especially if you have bad credit, no credit or a history of bankruptcy.
Conducting business outside of the U.S. Schemers typically operate out of foreign countries using phony U.S. addresses or P.O. boxes.
Pressuring you to act immediately. Bogus lenders will try to get your money or personal information before giving you paperwork.
Using similar-sounding names to well-known organizations. Phony companies often use names that sound like well-known or respected organizations, create legitimate-looking web sites and even produce forged paperwork or pay people to pretend to be references.
Advance fee loan offers can be enticing, but proceed with caution. Don't pay upfront for the promise of a loan. And, never give your personal information to an unfamiliar company or agree to a loan over the phone without written documentation. Understand advertising through a recognized outlet doesn't ensure an offer's legitimacy. Be suspicious if you're asked to deposit payments into a bank account or send funds through Western Union, MoneyGram or e-Transfer. Also, be sure lenders are registered with the state by checking with the Ohio Division of Financial Institutions at (614) 728-8400 or visit www.com.ohio.gov/fin/.
You can also check potential lenders out with BBB. Visit www.bbb.org or call (937) 222-5825 or (800) 776-5301.
John North is president of the Dayton Better Business Bureau.