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In quick need of a cash loan?  Read this article before sending in that one-time payment.

Similar to underground gambling crime rings, advance fee loan sharks are making a living off of trusting consumers in need of cash in a hurry.  They are scheming money from innocent people, promising credit or loans, only to leave them in a world of financial ruin.  These scam artists have been so successful because they often pose as legitimate financial lenders, doctoring their past enough to convince the unknowing to fall right into their trap.

The catch that leaves you in the lurch

As reported by law enforcement agencies in both the United States and Canada, many promotions for advance fee loans often guarantee that the likelihood of approval is very high.  Even if an applicant's credit history is blemished with foreclosures and collections, these companies claim to provide them with the cash they need.  Here's the trick - in order to take advantage of such an offer, the consumer is required to pay a fee up front.  So what's the catch?  How about this - the trickster runs off with the advance fee and the cash loan or line of credit never materializes. 

Most of the advance fee offers you'll come across are openly promoted in the classified section of a daily newspaper.  These ads often feature toll-free 800 numbers or numbers that represent Canadian area codes.  Loans are also advertised directly through the mail, radio or television spots.  Just because the company has established a legitimate media outlet does not mean that the ad they're placing is legitimate.  This goes for those posting in a newspaper to those who spend a bit more for television commercial. 

Defining the real lenders 

Keep in mind that legitimate offers for credit and cash loans typically do not require an advanced fee.  Though some lenders may charge an appraisal, credit report or application fee, these costs are usually deducted from the amount the consumer borrowers.  You should also be aware that these fees are generally paid to the broker or lender only after the loan has been fully approved.  While a legitimate institution may advertise a guarantee, they will certainly evaluate a consumer by overlooking their credit history and confirming that information in an application.  Law enforcement officials in Canada warn that it is highly unlikely that a Canadian lender would take a chance on citizens whose credit issues would prevent them from acquiring an approval in the United States. 

Many times, an advance fee loan shark will claim that their fees are required to compensate third party sources such as a credit insurance agency.  They will often go as far as faxing material using forged or stolen logos and letterheads from legitimate businesses.  While they may appear official, this material is fraudulent; the contracts they contain absolutely worthless.  To add insult to injury, some of these scam artists will use this stolen information to commit the crime of identity theft. 
 

The FTC is an organization dedicated to warning consumers about the financial dangers associated with advance fee scams and other deceptive practices.  They provide useful information to help you identify, prevent and avoid these malicious crimes.  To learn more about this popular scam, visit their website: www.ftc.gov or call toll free at:

(877) FTC-HELP (877-382-4357).

 

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