Hard up for cash? Don’t fall for advance fee loan scam

scam-alert-pic-150x150Getting into a financial bind is no fun at all. I once pawned a bunch of my favorite CDs and couldn’t afford to get them out again without missing a car payment. I lost most of my classic rock and had to buy the White Album again. I’m sure if I’d had a call out of the blue offering to loan me a few thousand dollars to pay bills I would’ve been tempted—until they asked me to pay hundreds up front. Major red flag.

That’s what we call an advance fee loan scam.

Unfortunately, some very crooked people also know what it’s like to be strapped for cash and are taking advantage. Your BBB has received recent reports of scammers calling consumers with “guaranteed” loans. All they have to do is wire money or give up banking details so the caller can get access to their account.

One consumer was told he was approved for a loan of $1,000, but in order to receive the loan, he had to wire payments of $132 and $120. The company then tried to get another payment of $120, but the consumer said he wasn’t sending more money and asked for his money back. The company refused.

The callers gave him two phone numbers, one with a (210) area code (San Antonio) and a (917) area code (New York City). I called both numbers and the people who answered had pronounced Indian accents, but claimed to have names like “John Smith.”

They wouldn’t give me an address or even tell me their city, state or country. They got pretty belligerent about it in fact. “Why do I have to tell you my address? Why is it any of your business?” One guy, when pressed, gave me a New York address that went to an apartment that based on Google Street View doesn’t look like anything close to a bank. I’m actually pretty sure they were calling from outside America.

Another consumer got several calls from someone with a (512) area code (Austin). The company sounded just like the one who ripped off the consumer I mentioned earlier, but it turned out to be different people running the same scam. Luckily she didn’t get taken.

They claimed to have an office in Austin, Texas and somehow they already had her name and date of birth. They told her she was approved for a $5,000 loan that she could get within two hours if she gave them her routing and checking account numbers. They also wanted her to go to CVS or Walgreens and get a Green Dot MoneyPak card so she could pay an up front fee of $500. Like the other scammer I mentioned, the caller had a strong Indian accent, but had an English-sounding name—Ryan Taylor. The consumer got suspicious and gave us a call.

I called and gave the man who answered a hard time, pressing for business details in case I needed to send him a letter. “Ryan” gave me an address in the countryside outside Austin. I told him I was looking at an empty field on Google Street View asked him if I would have to mail my letter to a cow. At one point he got a little shaken up and said he was in California, then backtracked and said Austin again. Again, I’m pretty sure he was based outside the U.S.

The consumer calls we got illustrated a couple of things:

  • Company names mean nothing. A scammer can give you a company name that sounds legitimate or even give you the name of a real company.
  • The area code means nothing. The scammers are capable of using phone numbers that sound local, but really aren’t.

You don’t have to wait for a phone call. You can find advance fee loan scammers online if you look. Please don’t. I found one website—unsecured—that consisted of nothing but a form for personal information like bank routing and account numbers, Social Security number  and more. I wouldn’t fill that out on a bet. I found another website that actually looked pretty impressive—but it was also clearly part of an advance fee loan scam. Whatever you do, don’t bite! If you’re already hard up for money, these folks will only make it worse.

BBB offers the following advice when looking for a personal loan:

  • Don’t do business with someone who calls with a loan offer you never asked for. Financial institutions don’t work that way. You have to apply and be approved for credit.
  • Don’t trust someone who says you’re “guaranteed” a loan and asks for money in advance for insurance or other fees. They are operating illegally.
  • Beware of applying for a loan through an unfamiliar website. The application could be run by a scammer who will either take your money directly or sell your information to other scammers.
  • Don’t do business with someone who cannot give you an address you can confirm as legitimate.
  • Carefully read any contract documents and make sure you understand all requirements before you enter any loan agreement.
  • Don’t trust a website or loan document just because it “looks official.” Sophisticated, official-documents and websites are easy to copy or fake. Just because a business looks legitimate, doesn’t mean it is.

Visit BBB.org to check the reliability of a company and find trustworthy businesses and report scams to BBB.