International alert warns of bogus-loan Web site surge

Victims across the United States and Canada have reported losing money, sometimes more than $1,000 each, to the Web sites in question, which promise loans to anyone regardless of previous credit history.

“People with the poorest finances are being victimized,” said Judy Mills, president and CEO of the Council of Better Business Bureaus, in a news release. “Many mistakenly believe they have no other option.”

According to the BBB, the victims used Internet search engines to find lenders that would guarantee low-interest rate loans for people with bad credit histories. Once they found companies that seemingly fit the bill, the victims submitted online loan applications and were subsequently contacted by individuals who identified themselves as company representatives and were told that they had been approved for loans.

The victims were told, however, that before they could receive their loans, they were required to pay a fee, either by wiring money or sending a money order, usually to a location in Canada. The consumers sent the money, but never received the loan and are unable to recover their money. They also may have put themselves at risk of having their identities stolen, particularly if they provided Social Security or bank account numbers.

The BBB cites several examples of companies that represent themselves as lenders for advance-fee loan scams:

• Intrest Plus Financial used a Milwaukee address of a legitimate company not affiliated with the scam lender.

• Statewide Capital Group falsely claimed to be located in Omaha, Neb., and presented a sophisticated Web site offering a variety of lending services at low rates.

• Lloyds Financial Group used a false street address in East Peoria, Ill. Its Web site promised debt consolidation, personal loans and business loans “regardless of the person’s previous credit history.”

• Home Guard Funding Ltd. (also known as Principal Investments) used a name similar to that of a legitimate Canadian mortgage broker and an address belonging to a Zion, Ill., law firm that had no connection to the lender.

• City Financial Corp. (also known as PeachState Financial Services) fraudulently claimed the BBB of Central Georgia’s address in Macon as its own.

“These bogus lenders are clever,” Mills said. “They use a variety of tools to imply legitimacy.”

Avoid Bogus Online Loans

The Better Business Bureau offers these tips for online lenders:

• Don’t use online search terms such as “bad credit loans” or “guaranteed loans.” These could lead to fraudulent sites.

• Don’t wire money or send money orders to secure personal loans. Legitimate offers of credit don’t require upfront payments of fees for collateral, processing, insurance, taxes or any other purposes.

• Don’t do business with lenders that guarantee a loan before you apply.

• Don’t do business with Web sites that refuse to provide a street address and a working telephone number.

• Use the BBB to check whether a Web site can be trusted. The BBB can inform you of any complaints, and BBB staff can visit the business location and conduct other research to verify a site’s legitimacy. If the site has a BBBOnline seal, click on it to check the BBB report.

• File a complaint with the BBB if you are victimized by an advance-fee lending scheme. While the chance of recovering the lost money is minimal, filing a complaint will help warn other consumers and assist in government investigations. [[In-content Ad]]