Advance Fee Loans What To Know About
About Advance Fee Loans
Advance-Fee Loans: Regardless of your credit history, some businesses guarantee you a loan or credit card. However, they demand that you first pay a “processing” or other cost. They are frauds. Recognize the warning indicators.
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What Is a Scam for Advance Fee Loans?
Do you require a loan to pay your mortgage, pay off credit card debt, or fix your car? Scammers who offer to acquire a loan, credit card, or access to credit make this kind of advance-fee loan fraud. Or they promise to connect you with a lender who will almost definitely be able to obtain those items for you. regardless of your credit background.
They say you have to pay upfront initially, though. The con artist may claim that the funds are needed for “processing,” “insurance,” “applications,” or other purposes. However, it is untrue. Both a lender and a loan do not exist. Additionally, the con artist and your money will vanish if you pay.
Scams involving advance-fee loans prey on those with poor credit or who struggle to obtain loans for other reasons. Scammers place advertisements online or make phone calls offering these fictitious deals. Lists of names of persons who have looked up or applied for payday loans or other loans online are purchased by many.
Know this if you’re thinking about applying to a lender.
- Since they need to know about your credit history, legitimate lenders won’t promise you a loan or other credit without first requiring payment.
- Before reviewing your loan application, legitimate lenders may demand an application or appraisal fee.
- However, no reliable source would ever claim that paying a fee ensures you’ll be approved for a loan.
Alerts to the Possible Fraud of an Advance-Fee Loan
The following indications point to a potential advance-fee loan scam:
Advertisements claiming you can obtain credit despite your credit past are placed by scammers: Something along the lines of “Bad credit? “No hassle — guaranteed,” “No problem,” or “We don’t care about your past.” A loan is something you deserve!
Before you apply, banks and other reputable lenders won’t guarantee or promise you a credit or loan. Before making a formal credit offer to you, they will review your credit report, validate the details in your application, and determine whether they believe you will be able to repay the loan.
Fees are concealed by con artists before you apply for a loan: Scam lenders may claim that your loan application has been authorized. However, they later state that payment is required before funds are released. It is a hoax. If the lender requests an upfront payment before approving the loan, it’s best to decline, especially if you’re told it’s for “processing,” “insurance,” or just “paperwork.”
Callers who commit scams offer loans or other credit: However, it is against the law for telemarketers to offer you a loan or other credit and demand payment in full before providing the requested credit. (According to the Telemarketing Sales Rule.)
Defend Yourself
Are you unsure of the legitimacy of the lender you are speaking with? Take these precautions to help shield yourself from con artists.
- Verify the lender’s registration status in your state: Wherever they conduct business, lenders are required to register. To find out if a lender is registered, get in touch with your state’s attorney general or the banking or financial services authority.
- Do an internet search: Enter the name of the business along with terms like “review,” “complaint,” or “scam” into a search engine. Additionally, investigate if any other people have reported scam calls from the company’s phone number by looking for them online.
- Put an end to robocalls: You should hang up and report a recorded sales pitch to the FTC if you pick up the phone and hear one. These phone calls are prohibited.
- Never pay for a guarantee: Walk away from anyone who demands payment in advance for anything, including credit cards, loans, debt relief, mortgage aid, or jobs. Nobody who is acting legally will ever demand payment for a guarantee. You can probably assume it’s a scam if they do.
- Seek assistance in managing your debt: Your alternatives may be more than you realize. Every state has nonprofit organizations that provide credit counseling services, many of which are inexpensive or free. Find out more about the various ways you can manage your debt.
Taking Action After Paying a Con Artist
Frequently, con artists ask for payments in ways that make it harder for you to obtain your money back. For instance, they might request payment in the form of Bitcoin. Money transfers via MoneyGram or Western Union. Or loading funds onto a gift card and providing the numbers on the reverse. Regardless of how you compensated the scam artist, the sooner you act, the better. Find out what to do if you have a con artist’s money.
Report Loan Scams With Advance Fees
Report fraud at ReportFraud.ftc.gov if you have lost money to an advance-fee loan scam or know anything about the company or con artist that called you. By reporting these wrongdoers, you assist law enforcement in apprehending them and make other members of your community aware of the fraud.
