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 Posted: Wed Sep 06, 2006 11:15 am Subject: READ this before you take another loan.... |
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The Truth About Advance-Fee Loan Scams
| Quote: | Advance-fee loan sharks are preying on unwary consumers, taking their money for the promise of a loan or credit, and leaving them in hot water. The scam artists often impersonate legitimate lenders to entice consumers into falling for their bogus offer.
According to law enforcement agencies in the U.S. and Canada, ads and promotions for advance-fee loans suggest — or even “guarantee” — that there’s a high likelihood that a loan will be approved, regardless of the applicant’s credit history. But to take advantage of the offer, the consumer has to pay a fee. The catch? The scam artist takes off with your fee, and the loan never materializes.
Many advance-fee loans are promoted in the classified sections of daily and weekly newspapers and magazines. Often, the ads feature toll-free 800, 866, or 877 numbers, or area codes from Canada, such as 416, 647, 905, or 705. The loans also are promoted through direct mail, radio, and cable TV spots. The fact that an ad is in a legitimate media outlet — like the local newspaper or radio station — doesn’t guarantee that the company placing it is trustworthy.
Legitimate offers of credit do not require an up-front payment. Although legitimate lenders may charge application, appraisal, or credit report fees, the fees generally are taken from the amount borrowed. And the fees usually are paid to the lender or broker after the loan is approved. Legitimate lenders may guarantee firm offers of credit to “credit-worthy” consumers, but first, they evaluate the consumer’s creditworthiness and confirm the information in the application. Canadian law enforcers caution that it is highly unlikely that legitimate Canadian lenders would take a risk on U.S. citizens whose credit problems preclude them from getting a loan in the U.S.
Often, advance-fee loan sharks claim that their fees will go to a third party for credit insurance or a related service. Sometimes, they even fax materials using stolen or forged logos and letterheads from legitimate companies. The materials are fakes, according to enforcement officials, and the contracts the scam artists ask consumers to sign are worthless. Adding insult to injury, some scammers have used the information they collect from consumers to commit identity theft.
Often, advance-fee loan scammers direct applicants to send the fees via Western Union money transfers payable to an individual, rather than a business. They ask applicants to use a “password code” with their Western Union payment, which allows the scammers to hide their identity.
U.S. and Canadian law enforcers say consumers can avoid being taken by advance-fee loan sharks. Here’s how:
Don’t pay for the promise of a loan. It’s illegal for companies doing business by phone in the U.S. to promise you a loan and ask you to pay for it before they deliver. Requiring advance fees for loans also is illegal in Canada.
Ignore any ad — or hang up on any caller — that guarantees a loan in exchange for a fee in advance.
Remember that legitimate lenders never guarantee or say that you will receive a loan before you apply, or before they have checked out your credit status or contacted your references, especially if you have bad credit or no credit record.
Don’t give your credit card, bank account, or Social Security number on the telephone, by fax, or via the Internet unless you are familiar with the company and know why the information is necessary.
Don’t make a payment to an individual for a loan; no legitimate lending organization would make such a request.
Don’t wire money or send money orders for a loan through Western Union or similar companies. You have little recourse if there’s a problem with a wire transaction. Legitimate lenders don’t pressure you to wire funds.
If you are not absolutely sure who you are dealing with, get the company’s number in the phone book or from directory assistance, and call it to make sure you’re dealing with the company you think you are. Some scam artists have pretended to be the Better Business Bureau or another legitimate organization.
Check out questionable ads by calling Project Phonebusters in Canada toll-free at 1-888-495-8501. If you live in the U.S. and think you’ve been a victim of an advance-fee loan scam, report it to the FTC online at www.ftc.gov or by phone, toll-free, at 1-877-FTC-HELP (1-877-382-4357).
Finding Low-Cost Help for Credit Problems
It’s a good idea to try to solve your debt problems with your creditors as soon as you realize you won’t be able to make your payments. If you can’t resolve your credit problems yourself or need additional help, you may want to contact a credit counseling service. There are nonprofit organizations in every state that counsel and educate individuals and families on debt problems, budgeting and using credit wisely. There is little or no cost for these services. Universities, military bases, credit unions, and housing authorities also may offer low- or no-cost credit counseling programs. Check the white pages of your telephone directory for a service near you.
The Toronto Strategic Partnership is a group of law enforcement agencies in the U.S. and Canada that works together to prosecute cross border fraud. Formal members include the Toronto Police Service, the Competition Bureau Canada, the Ontario Ministry of Consumer and Business Services, the Ontario Provincial Police, the U.S. Federal Trade Commission and the U.S. Postal Inspection Service. Other partners include the Ohio Attorney General’s Office, the Royal Canadian Mounted Police, and the Police Services of York, Durham and Peel in Ontario.
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. |
http://www.ftc.gov/bcp/conline/pubs/tmarkg/loans.htm
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~A journey of a thousand miles begins with a cash advance~
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erzeke1
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| Posted: Fri Sep 22, 2006 8:25 pm Subject: Darn! |
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Well, thanks for info, but I wish I would have seen this the day you posted it. I sent money ($1935.00) to be exact to one of these scammers on 9/8/06. Now I am out of money and not sure if i can get it back. I have reported it to an online complaint website, but not sure what else I can do. I am so embarrassed to have fallen for it, but desperate people will do desperate things. But, now I am in a worse situation than I was before!!
I hope your post will help others!!
Thanks!
Melissa
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CnCsMomma
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| Posted: Sat Sep 23, 2006 10:11 am Subject: |
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Mbarrett, it's important that you post your complaints against the scam companies to all legal authorities you can think about. Report them to your state attorney general office as well as the BBB. They must be doing such illegal things on many other people also. There must be large number of complaints from everywhere before the government takes actions against them. You have a strong case, have you taken any legal advice from an attorney?
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Christina
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| Posted: Sat Sep 23, 2006 11:40 am Subject: |
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Great info,Erzeke! Maybe someone will read this before they fall into that trap. For me,that's what this site is about-educating ourselves in debt and debt practices to not make the same mistakes!...Karen
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Bossy4455
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| Posted: Mon Oct 02, 2006 6:43 pm Subject: |
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Yes, we need to get the word out so others don't fall to these types of scams. I was reading my local paper and they had a warning in the classified section. Also, there is a warning on my bank's home page when I check my online banking. It's good to see these types of things and thanks for posting the article.
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CowampChicken
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| Posted: Fri Oct 20, 2006 8:14 pm Subject: loan |
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I'm in a jam with payday loans, and a few utility bills it would be very helpful if i could take out a personal loan. Are there any places out there that will take someone with poor credit and no house?? Thanks for the information in advance
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kimbum06
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| Posted: Sat Oct 21, 2006 11:57 am Subject: |
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I doubt there will be any good company that will loan people with poor credit. If any company is offering money, most turn out to be a scam. Make sure that you shop for the right company before signing with anything.
If possible, you may opt for another alternative in clearing your existing debts. Some companies consolidate payday loans. You come up as a registered member. Did you sign for the free counseling? A consultant will call and let you know if he can assist on payday loans. It will be a good start and if this is done, you won't have to take new loan in paying your debts. Being with bad credit, the situation can only become tougher.
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FlyingCats
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| Posted: Mon Jan 29, 2007 10:45 pm Subject: loans |
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Hey guys, its been a while.
Always check the Better Business Bureau website before taking out any loans. This should go for new credit cards as well.
They will have a listing of all complaints and if they were resolved or not. Only do business if they have a clean rating AA. They will also list their lending liscence ( if they have one ).
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Glynnie11
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| Posted: Fri Apr 13, 2007 9:48 am Subject: BBB and this company?? |
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This company ICS is listed as a bad company on the bbb and yet right here in this post it says dont deal with a company with an unsatisfactory rating .Just AA ratings so should i deal with ICS or NOT ??? THis is confusing .
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TC
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| Posted: Wed May 02, 2007 9:59 am Subject: |
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how do you find the laws out in your state for payday loans
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Guest
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| Posted: Wed May 02, 2007 1:24 pm Subject: |
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Guest - go to paydayloaninfo.org - click on "state info" on the left side of the screen, then click on your state on the map that comes up. You will find the laws for your state as relate to payday loans, the allowable interest rate, and who to contact to file a complaint if a company is breaking your state laws.
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SUEBEEHONEY70
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aciotsf
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| Posted: Thu Sep 20, 2007 8:26 am Subject: Fidelity Financial Credit Resource |
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I got a call yesterday from Fidelity Financial Credit Resource. They offered me a $5000 loan but required a $1065 downpayment. I told that lady that I thought they were a scam and if I had $1064 I wouldn't need to borrow $5000. Just a heads up.
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lbabin
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| Posted: Thu Sep 20, 2007 9:02 am Subject: debt |
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Does anyone know, if the 'loan scam' pertains to Cash Call, too?
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sdchargers_63
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| Posted: Thu Sep 20, 2007 5:04 pm Subject: |
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| Quote: | | if the 'loan scam' pertains to Cash Call, too? |
Uhhhh, no.
They didn't take your money and run. They actually loaned you money. It is a ripoff, not a scam.
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Morningstar
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| Posted: Thu Sep 20, 2007 7:50 pm Subject: |
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I was scammed by one of these companies earlier this year for $900 and then they called and said I needed another $900 to secure the $5000 loan. They had me western union the money to CANADA! Yeah, can you spell DUMB???
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bflow30
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