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MAINE BUREAU OF CONSUMER CREDIT PROTECTION

35 SHS, Augusta, Maine 04333

Bureau of Consumer Credit Protection Issues Alert to Maine Consumers and Businesses: Loan Scams Increasingly Prevalent

July 5, 2012

Maine’s Bureau of Consumer Credit Protection issued an alert Thursday to warn consumers and business about the increasing prevalence of ‘advance fee’ loan scams, and the frequency with which fraudulent companies falsely claim to be located in Maine. The most recent examples involve “Hempford Finance Center” and “Metta Capital Funding,” both purporting to be based in Portland.

The Bureau’s investigation of Hempford Finance Center, which may also be operating as Hempford Funding Center, found it operating much like other fraudulent loan companies. In one case, a consumer applied online with Hempford for a $5,000 loan and received documentation outlining the terms and conditions of the loan. The company wanted five up-front payments of $177.50 each, totaling $887.50, before the $5,000 loan would be made available. The company asked for the payments to be wired from a local supermarket or department store.

“Hempford is not a licensed lender in Maine, and is not registered as a corporation authorized to operate in this State,” said David Leach, Principal Examiner with the Bureau. “Additionally, the Portland Police Department confirmed that no business by the name of Hempford Funding or Hempford Finance Center exists at the Brighton Avenue address listed on the company’s loan documentation.”

A review of Metta Capital Funding also revealed standard procedures for advance fee loan scams. In this case, the company lists a phony business address in Portland, but requires consumers to send money to a location in Canada. With transactions of this kind, it’s typical for consumers to be directed to transmit funds to an alternative location—often thousands of miles from the company’s fake address. Once the advance fee is sent to the perpetrators, there is little chance of recovering those funds.

The Bureau indicated that advance-fee loan scams appear to be on the rise, with an increasing number of fraudulent lenders claiming to be headquartered in Maine. Other recent investigations by the Bureau involve entities called:

-- North Lake Equity Group claiming to be located on Sanford Road in Wells. Consumers from other states were told to transmit advance fees through the “Money Pack” system at WalMart.

-- Crestridge Capital purported to be located in Belgrade. In one case, a consumer was told to wire $770 in upfront payments for a $5,000 loan.

-- Bellbrook Finance Center falsely claimed to be located in Belfast. The Bureau believes this entity then changed its name to Millbrook Finance Center and provided a phony Biddeford address on its website. This company promised loans of $5,000-$10,000 with about $1,000 in up-front money requested in the form of a wire (MoneyGram, Western Union, GreenDot).

-- Ancaster Solutions purported to be based on Shoal Cove Road in West Bath. The person living at the address was unaware of the company.

The Bureau notes that Maine has many reputable licensed lenders, and advises consumers and businesses to never wire or mail certified funds to unknown lenders. The Bureau recommends that consumers deal only with known, licensed lenders, and encourages anyone with questions or concerns to call the Bureau toll-free at 1-800-332-8529 to verify the status of lenders or check the Bureau’s licensed supervised lenders at www.credit.maine.gov. Out-of-state callers may dial 1-207-624-8527 for license verification.

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The Maine Bureau of Consumer Credit Protection was established in 1975 to enforce a variety of credit-related consumer laws. The Office licenses lenders, creditors and collectors; conducts periodic examinations of creditors to determine compliance with state laws; and responds to consumer complaints and inquiries. The Office also conducts educational seminars and provides speakers to advise consumers and creditors of their legal rights and responsibilities.