Caller asks for advance fee: The biggest and reddest of red flags

ID-10058480We’re accustomed to hearing about scams at Your BBB. People call in to ask about offers that sound too good to be true. Usually we point out “red flags” that could be signs of a scam and ask them to use their best judgment.

Number one red flag for almost any type of scam? Being told to pay upfront. Make that flag extra big and red if they ask for payment with a reloadable card of some type.

That applies to soooo many other scams: loan scams, rental scams, work-at-home scams, lottery scams, grant scams, puppy scams… You name it. It’s a favorite technique for scammers, because it works on way too many people.

Unfortunately, some people call BBB because they’re afraid they’ve already been burned and are hoping against hope that the offer was legitimate. Most of the time, we don’t have good news. They already paid upfront for a loan with a Greendot card or something similar and the money is gone forever.

I especially hate it when someone contacts us after getting burned for a lot of money. Usually it happens in smaller chunks that add up. Once a scammer gets you to pay a “fee” or a “tax” or whatever, he’ll get you to do it again and again, until you give up.

We recently got a visit from an Austin woman who got taken by an advance fee loan scam. She received a call offering her a $1,000 loan, then was convinced to make several reloadable card payments that added up to more than $500.

The people claimed to be with a payday loan company supposedly located in San Antonio, Texas, but they are likely not even located in the United States. Over several days, the woman received calls about her promised loan from people claiming to be with various companies and agencies—including the U.S. Department of Transportation, Bank of America, U.S. Postal Service and Better Business Bureau. All fake.

I wish we could’ve told her we could get her money back or even punish the people who ripped her off. Unfortunately, scammers get you to send payments with pre-paid cards for a reason: once you do it, it’s virtually untraceable. Your money is gone forever.

Best thing to do is always remember that biggest, reddest red flag: If someone calls with an offer and you have to pay upfront with some kind of pre-paid card, it’s a trap. Hang up!