“Schemes preying on people looking for loans aren’t new and they’re flourishing in an economy when so many are struggling to get by,” said John North, BBB president and CEO. “Complaints received by your BBB are only the vocal few and we know from experience many more people across the country are falling for this scam every day—just when they can least afford it.”
Your BBB has recently received complaints about advance fee loan scammers operating under more than 75 different names, including Capital Alliance Financial Group, Harford Financial Services, Howard and Clark Financial, Lending Hand Financial, among others.
Most people stumble upon the scams online or learn about the bogus loan offers from ads in local Thrifty Nickel publications and online through classified sites, like Craigslist. Often, an advance fee loan scam Web site will be created and taken down within a couple weeks only to be replaced by another operating under a different name and fake business address.
The Web sites look professional and might even put the victim through the rigors of filling out loan application forms—often requiring the victim’s bank account and Social Security numbers. Eventually victims are told they’re approved for loans and just need to pay as much as thousands of dollars upfront via money order or wire transfer to pay for insurance or collateral. Those who pay never get the promised loans and are even sometimes tricked into giving the scammers more money.
Your BBB advises cash-strapped individuals and small business owners to recognize the following red flags of advance fee loan scams:
* The lender has a bad reputation—or none at all. Most trustworthy lenders have established track records. Be wary if you can’t find much information about a lender online. Research lenders thoroughly online and with your BBB. Visit www.bbb.org or call (937) 222-5825 or (800) 776-5301. * The lender isn’t registered with the state to do business. Check with Ohio’s financial or banking regulators. * The lender asks you to wire money or send a money order (for insurance or collateral) before you can receive the loan. You might be told to wire money to another country, another red flag.
If you’ve become a victim of an advance fee loan scam, contact your Better Business Bureau and report the incident to your police department. If you were asked to wire money to Canada, file a complaint with Canadian law enforcement by calling toll free (888) 495-8501 or e-mail info@phonebusters.com.