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FRAUD

ADVANCED FEE LOAN SCHEMES

Have you been trying, unsuccessfully, to borrow money from a bank or other financial institution? If so, you may be contacted by someone offering you a “guaranteed” loan, if you pay a fee up front. Beware: the person is likely a con artist and his ploy is known as an advance fee loan scheme.

The person perpetrating the advance fee loan scheme usually tells his victims he will be able to get a loan for them from a bank, credit union or savings and loan association. In reality, the person has no ability to help you, nor any intention of doing so; he wants only to steal from you. Once he has your money he may simply disappear. Or he may stall for a while, coming up with various “reasons” why he has not managed to secure your loan. Meanwhile, he is probably also stealing from others in the same fashion.

These tips can help you avoid becoming the victim of an advance fee fraudster:

  • Do not put a lot of stock in a verbal promise of a guaranteed loan. Ask why a promoter would be able to obtain a loan for you, if you have been unsuccessful. 

  • Be very cautious if you have been asked to pay a loan fee in advance. Con artists who use this scheme usually say their fee will be a certain percentage of the total amount of your loan (such as 5%, or $500, on a loan of $10,000). 

  • Always find out about the person or company you are dealing with. Get the name of the loan representative as well as the name, address, and telephone number of the company. 

  • Ask for references: names, addresses, and phone numbers of other customers of the representative or company. Call and ask if they got their loans and whether they had any problems.  

  • Find out the name of the lending institution that is to fund your loan. Be wary if the representative does not wish to divulge this information. 

  • Contact the lender to double-check all the details, including all oral and written promises the promoter has made about the lender’s terms and conditions for support.  

  • Think about asking for an attorney’s or accountant’s advice.


 

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