While legitimate lenders may charge you a small amount to process your application and cover the cost of checking your credit, the fees generally are taken from the amount borrowed. PROTECT YOURSELF: TIPS TO AVOID ADVANCE-FEE LOAN SCAMSĭon't pay for the promise of a loan.
Making matters worse, some scammers have used the information collected from advance-fee loan victims to commit identity theft. After sending payment, the loan is never received, and refund attempts are futile. Often, the applicant is directed to send the payment via wired money transfer, payable to an individual rather than a business.Ĭonsumers filing complaints with the Michigan Attorney General's Consumer Protection Division have been directed to wire payments to Canadian addresses. In order to receive the approved loan, applicants are directed to pay money up-front, under the guise of an application fee, a security deposit, for credit insurance, or some other fee. A fancy website or an ad in a recognized media outlet does not guarantee that the company is trustworthy.Ĭonsumers responding to such websites or ads are taken through a phony application process and later may even receive fake loan approval documents. Sometimes the scammer's website or ad will even use a legitimate company's name or physical office address. The advance-fee scammer may use a false business name and address, often with toll-free 800, 866, or 877 phone number that is difficult to trace or rings into Canada. The websites and ads offer easy access to loans, regardless of credit history. If you're asked to pay a fee for the promise of a loan or credit card, especially to a "lender" who isn't interested in your credit history, you can count on the fact that you're dealing with a scam artist. The scam may start as a legitimate appearing website offering online lending services or an ad in the newspaper: "Bad credit no problem - loans available by applying online or calling 1-#-#-#." The consumer is soon told, "You are qualified, but you must send a fee to process your application/pay a security deposit/pay for insurance." The victim pays the money, and no loan or credit card is issued. Advance-fee loan or credit card scams are often targeted at people with bad credit.
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