If
you’re looking for a loan or credit card but don’t think you’ll qualify
– or if you’ve been turned down by a bank because of your credit
history – you may be tempted by ads and websites that guarantee loans
or credit cards, regardless of your credit history. Should you apply,
you’ll likely find out that you have to pay a fee just for the promise
of the loan. Best to ignore these ads or sites.
If
you have to pay a fee for the promise of a loan or credit card, you’re
dealing with a scam artist. More than likely, you’ll get just an
application for a credit card, a stored value or debit card, or a card
that has so many strings attached, it’s practically worthless.
To Do
Be alert to tricks of the advance fee loan trade so you can avoid them. For example,
A lender who isn’t interested in your credit history is cause for concern.
Ads that say “Bad credit? No problem,” “We don’t care about your past.
You deserve a loan,” “Get money fast,” or even “No hassle – guaranteed”
often indicate a scam.
If disclosures about fees aren’t clear and prominent, take your business elsewhere.
Scam lenders may say you’ve been approved for a loan, then call or
email demanding a fee before you can get access to any money.
If the offer of the loan is made by phone but you have to pay before you get access to any money, it’s illegal.
It’s illegal for companies doing business in the U.S. by phone to
promise you a loan and ask you to pay for it before they make good on
their promise.
A lender who uses a copy-cat or ‘wanna-be’ name is a reason for you to be suspicious.
Crooks give their companies names that sound like well-known or
respected organizations and create fancy-looking websites. Some scam
artists pretend to be the Better Business Bureau or another reputable
organization, and some produce forged paperwork or pay people who
pretend to be references.
A lender who is not registered in your state is a red flag.
Lenders and loan brokers are required to register in the states where
they do business. To check registration, call your state Attorney
General’s office or your state’s Department of Banking or Financial
Regulation. The numbers are listed in the Blue Pages of your telephone
directory.
A lender who asks you to wire money or pay an individual is questionable at best.
Don’t pay a person for a loan or credit card directly; legitimate
lenders don’t ask you to do that. In addition, don’t use a wire
transfer service or send money orders for the promise of a loan. You
have little recourse if there’s a problem with a wire transaction, and
legitimate lenders don’t pressure their customers to wire funds or send
them by courier.
