Advance Fee Loan Scams

October 21, 2007

This scam preys on people who need money the most and have a hard time obtaining credit by traditional means. When you're in a financial pinch, this sounds like a good way to get some quick, short-term money that you can make up later.

Here's how it works, you get a phone call, email or go to a website. The lender offers a loan to help you with your cash flow crunch, but first asks that you send them (usually by wire transfer or reloadable card) a loan processing fee, which could be hundreds or thousands of dollars. Like any wire transfer, it is like sending cash, you'll never see the money and you'll definitely never see the "loan" to help you meet your financial obligations. Don't fall for it.

In a legitimate loan scenario, the fees are paid after the loan has been approved, not before. We advise consumers to do their homework and make sure the lender you're dealing with is legitimate and licensed to help consumers in Maine so you have the necessary consumer protections if something goes wrong with your loan.