Advance Fee Loan Fraud Brokers

Advance fee loans are usually, if not always, empty promises of a personal or business loan requiring payment of a fee in advance. Fraudulent advance fee loan schemes generally prey on vulnerable consumers — the unemployed, those who have bad credit ratings, or those in immediate need of money for emergencies.

Ads promising “money to loan . . . regardless of credit history” lure consumers into paying fees that range from $25 to several hundred dollars, in advance of supposedly receiving loans that are “guaranteed.” Often, these ads feature “900″ numbers, which result in charges on your phone bill, or toll-free out-of-state or country “800″ numbers.

The fee may be called “processing”, “application” or “first months payment”. While legitimate lenders may require you to pay application, appraisal, or credit report fees, these fees are never required before the lender is identified and the application is completed. In addition, the fees are generally made payable to the lender, not the broker or arranger of the supposed “guaranteed” loan or extension of credit.

In most instances, you never receive the promised loan and either never hear from the loan company again or are later told by “turn down room” — a third-party that denies applications for loans and other credit — that you are ineligible for the credit.

Small businesses have been charged as much as several thousand dollars as an advance fee for a larger loan. Whether you are an individual  or the owner of a small business, the result is the same: you don’t get your money; the con artist does.

In the U.S. it’s against the law to ask for money up front to help obtain a loan. The money must be in your hands for seven days before payment can be requested. This is the same for either a direct loan or through a third party.

Get loan offers in writing, shop around, then compare promises to the written agreement. There is free or low cost help with your credit available at U.S. Consumer Credit Counseling Service at 1-800-388-2227.