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BBB: Beware of Loan Scams

Wednesday, February 21, 2007 - 01:00
BBB: Beware of Loan Scams

Signs A Lender 
May be a Scammer

* Lender pressures you to act immediately.
* Lender "guarantees" loans even if you have poor credit, no credit or a bankruptcy.
* Lender refuses to provide a street address location.
* Lender demands you wire of send money before you have a loan offer confirmed in writing.
* Lender's communications contain typos and grammatical errors.
* Lender can not be reached by telephone, or your calls and e-mails are not returned.
(Information source: Council of Better Business Bureaus)

ARLINGTON, VA (Feb. 14, 2007) - The Council of Better Business Bureaus (BBB) has issued a warning about a recent increase in advance fee loan scams. Individuals and organizations are reporting losses as much as $1,000 after responding to TV, newspaper or online advertisements that guarantee loans to those with poor credit.

Here's how the scam works: The pending victim calls a toll-free phone number from the advertisement. The receptionist takes the credit application, and informs the caller that paperwork will be sent that needs to be completed. Callers also are informed they have been approved for a loan between $5,000 and $100,000, and that they will receive the funds as soon as a fee is paid. Scammers tell callers that the fee is needed to cover the first payment, is required as a security deposit or is a processing fee.

The BBB says that the loan applicant is then instructed to send a money order or wire the money. The loan is never received, nor can the money sent be recovered. In addition, identity theft is a further risk to those who provided their Social Security numbers or bank account numbers.

(Source: BBB)

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