Consumer Alert: Attorney General Gansler Warns Consumers
To Be Wary of Advance-Fee Loan Scams
A Baltimore City
man applied for a loan on the Internet. An individual claiming
be from the loan company telephoned the man a couple
days later and explained to him that due to previous credit problems,
he must pay a fee, or “collateral,” in order to receive
the loan. The man was instructed to send the money through a wire
service to an address in Canada. He was told once the money was
received, he would be reimbursed for the wire fees and approved
for the loan, which should be direct deposited into his bank account.
A couple days later, the man still had not received the loan money
in his account and made phone calls to the loan company. After
numerous calls, he never heard back. He lost $2,000.00.
Advance fee loan scams,
just like the one described above, have been around for years.
These kinds of offers often appear in the
classified section of newspapers, but also appear on local cable
stations, the radio, or the Internet. The advertisements offer “guaranteed” loans
or credit, even for people with credit problems and previous bankruptcies.
Consumers apply for the loans, and when contacted, they are told
they must send money in advance to cover such things as “insurance”, “collateral”, “pre-payment” or
other fees the company creates. Consumers are then often asked
to wire the money to an out of state address. Once the con artists
receive the money, they disappear, and, of course, the consumer
never actually receives the loan.
Attorney General Gansler
wants Maryland consumers to know that legitimate lenders never “guarantee” loans
and legitimate offers of credit never require payments in advance.
He advises consumers to:
- Be extremely
skeptical of offers that imply a guaranteed loan or credit
card, regardless of credit history.
- Check out any company
offering a loan with the Maryland Division of Financial Regulation
calling 410-230-6097. All businesses offering consumer loans
in Maryland must be licensed with the Division.
- Contact the Attorney
Consumer Protection Division at 410-528-8662, toll free 1-888-743-0023, or
online at www.oag.state.md.us, or
the Division of Financial Regulation, if they have been a victim of an
advance-fee loan scam.