Advance-fee loan scams are claiming countless victims every year. The companies request advance fees from customers while promising loans to be paid out at later times. These fraudulent companies often lure the customer into doing business with them by impersonating legitimate institutions and laying out bogus offers. Since there are many financial loan institutions it is hard to tell which ones are legitimate and which ones are scam companies waiting to take your money. There are a few easy ways to recognizeadvance-fee loan sharks.
Most illegitimate companies advertise their loan offers in the classified sections of local newspapers, magazines as well as on the internet. Often the ads feature 900 numbers which charge the customer to even inquire about to company. Others offer toll free 800 numbers or even area codes from Canada, for instance 647,905, or 416. Sometimes loan ads are promoted on radio and television stations also and just because the advertisement is placed on a legitimate media outlet does not mean it is a legitimate company.
These advance-fee companies claim that they can guarantee you a loan for a fee paid in advance. Fees range anywhere from under one hundred to several hundred dollars. Legitimate loan companies would never ask for fees in advances, however, sometimes they do require processing fees that are usually deducted from the actual loan amount. With the fraud companies they will often get personal information, like social security number, income statistics, or even checking out numbers on the first phone conversation. The phone operators then ask the customer to call back in fifteen to thirty minutes so that they can verify credit. When the consumer returns a call to the loan shark they are greeted with an approval. These verbal approvals come with the stipulation that fees must be paid in advance, mostly in the form of a credit card or money order. The borrower is then told to wait a week or more until paper work as been drafted and loan fees have been verified, then they will get approval in the mail. If for some reason the borrower is later denied, fees are promised to be returned.
Often after a couple of weeks customers get some form of denial through the mail and no returned fees. If the fraudulent advance-fee loan company have not already moved locations and changed numbers they will try to stall the borrower when he or she inquires about their non returned fee payments. Most of the time these illegitimate companies do not keep one number or location very long, in some cases even moving operations from state to state. This leaves the customer who needed the loan in the first place even more in debt and cheated.
Here are some helpful tips to help you avoid advance-fee loan scams.
- Ignore ads or telemarketers that guarantee a loan in exchange for an advance fee. It’s against the law for a company to ask you for or accept advanced payments for services until you receive the loan.
- Most legitimate lenders never guarantee that you will get a loan or a credit card before you apply.
- Never give out your credit card, bank account, or social security number over the phone, internet or fax, unless you are completely sure of the legitimacy of the company.
- Never trust or make fee payments on a mere verbal contract or agreement, always verify in writing first.
- If you are uncertain of the company you are dealing with get their number from a directory and call to make sure it is in fact the companies whose name is being used in the ad.
- Never make payments through western union or other similar companies because you have little recourses id there is a transaction problem, also never make payments out to an individual, no legitimate company would ask you to.
If there is any question to the legitimacy of a company or if you believe you have been the victim of fraud you can contact the Federal Trade Commission (FTC) online at www.ftc.gov or be telephone, 1-877-382-4357. Canadian residents should call 1-888-495-8501.