Credit.com is fighting advanced-fee loan fraud for National Consumer Protection
Week 2009.
What is advanced-fee loan fraud?
With this scam, fake lenders offer a too-good-to-be-true loan
to a desperate borrower. People with bad
credit are more at
risk for a loan scam because they aren't able to qualify
for a loan through standard banks. Currently, you need a credit
score well over 580 to get approved for most loans.
Funds are wire transferred by the victim – usually to Canada – and
the loan never appears. There is no way to recover the lost
money after it has been sent to the scam lender.
How widespread is loan fraud?
In 2008, the BBB received 2,300 complaints from victims, a
21% increase from the year before. According
to the National Consumers League Fraud Center, advanced fee
loan scams increased to account for 3% of complaints in 2007,
up from 1% in 2005. They estimate the average loss to be $1,310.
With the credit crisis making legitimate loans harder to find,
the volume of complaints has increased significantly.
Credit.com receives several reports from victims and near victims
of this scam each week.
What can be done to stop loan fraud?
Credit.com recommends that all loan fraud victims report
their cases to the police, their state attorney general and
the FTC. Reporting the incident to these agencies doesn’t
usually result in direct action for the victim, but it can
help build awareness for the extent of these crimes.
What
has Credit.com done?
Our team of personal finance experts investigates reports
of loan fraud and posts warnings to consumers online.
Credit.com has identified scammers going by names like Brookfield
Lending, Affinity
Financial Trust, American
Reliance Financial, Triple
Touch Financial, Loan
Union Financial, Special
Loan Services, Pine
Tree Lending and Berkley
Lending Group. We have worked with numerous victims
who have lost between $600 and $4,500 to advanced-fee loan
fraud.
Credit.com
has also created a section in our forum where
loan scam victims can share their story and work together.
Where can I get more information on loan scams?
The FTC has
information about advanced fee loan fraud. The FDIC and Western
Union also have information about the scam.
Where can I get a legitimate loan?
Credit.com works with authentic, national lenders to provide personal
loans online. These lenders will never ask
you to send a deposit or insurance payment in order to obtain
financing.
Have you been a victim of a lending scheme? Send your
stories to our team of credit experts at tidbits@credit.com or
join the forums to
share your story and talk to other victims. Together we can
help spread the word and put a stop to loan fraud.
Quote of the Month
"Give up what appears to be doubtful for what is certain. Truth
brings peace of mind, and deception doubt."
-
Muhammad Ali
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