Are you looking for a Loan? Beware of Advance Fee Loan Scams.

In an Advance Fee Scam, the victim is convinced to advance money to the scam artist with the lure of delivering goods, services or financial gains that eventually fail to materialize.  Scammers operate Advance Fee fraud in a variety of ways. The most well known being lottery, inheritance and other fund transfer scams also known as Nigerian 419 scams. Due to the explosion of information available in the digital media, the people in western countries are well aware and hence are able to fend off Nigerian 419 scam attempts, which now seem to be primarily targeted at the third world countries.

While the Nigerian 419 scams have lost sting, Advance Fee Scam for Loans is raging in US, UK, Canada and other western countries.  The economic slowdown has impacted a large number of people who are forced to look out for Payday loans, to take care of their immediate needs.

And in the process, they are being scammed by a marauding bunch of Payday Loan websites into paying Advance Fees, with the promised loan never arriving.

Let’s capture few stories here as reported by our users.

Hear From Geena - USA

“I was offered a loan of $5000. Was asked to make first payment of what would be my monthly bill of $210. Paid it with Greendot Moneypak card. And then they told me my credit history is not good (Which they are supposed to have checked before loan was approved) and I have to pay $250 to get through. I did that and then he came back and said I need to pay transfer fees of $150... This is when I felt I was being scammed.

Called a friend who works with a bank and she told me this is CERTAINLY a scam and asked to call back and get their address. When I called back and said I need their address before I sent money, he got wild and said I will be sued for fraud!”

Look  how the scammer builds up the story!   Advance,  bad credit history, then transfer fees! If Geena had met the demand for the so called transfer fees, they would have come up with something else.

Hear From Nellie - USA

“I was looking for funds badly when I got a call from “Amy” (Crook No: 1) of Elite Cash Advance offering $3000 with $150 Fees. Rest to be paid over a period of 24 Months. I grabbed the offer and sent 150 with Greendot Card. Waited for 24 hours, there was no sign of loan.

Called “Amy” who asked to wait and then came back to say, it’s all done except I need to pay $350 bank charges. I was shocked but was persuaded to  pay since she told loan will get credited in 10 minutes.

When I called back, she put me on to a “supervisor” (Crook No: 2 - # 2097384085) who told to pay $350 State Tax!!!

My plans have collapsed. The whole thing was a stage managed con. I am gutted. I have filed complaint with police. I hope they will recover my money.”

See how Nellie was scammed!  She was told to pay $150 as Advance. And then came the $350 Bank charges which she paid without knowing she was paying thieves! And then she was faced with   a new demand for $350 (Taxes!)

Don’t become a victim of scam loan companies! 

Refuse to take a loan:

• If you are offered a loan on phone without specifically applying for it
• If you are unable to get a verifiable address of the lender in your state
• If the lender is not in your state or is likely to be in a foreign country
• If the lender only has a website and no physical presence
• If  the lender is not registered and licensed to lend in your state
• If the lender asks for an Advance Fee before crediting loan to your account
• If the lender asks you to pay Fees using Western Union, Money Gram or PreLoaded Cash Cards
• If the lender asks you to pay money to somebody else rather than the company (Pay only in the name of the company)
• If the lender asks you to show you are capable of paying, by loading a cash card

How to verify whether the lender is registered & licensed to lend in my state?

To check whether  the company offering a payday  loan is registered and licensed to lend, visit the website  of CFA (Consumer Federation of America) at  http://www.paydayloaninfo.org/state-information

Select respective State. In the State's page, click on "Licensee Database'  and search for the company by its name.

For example, select California and search for “Moneytree”. You will find that this company is registered to lend and all   branches in California are listed with license numbers.

Your experience with Advance Free Fraud  may  be shared in the COMMENTS section below, for the benefit of other users.