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Media > Newsletters > Consumer Advocate > September 2011 > Scam alert: advance fee loans

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Scam alert: advance fee loans


Consumers throughout Ohio are reporting losing money to advance fee loan scams. In some cases, they send hundreds of dollars out of the country for loans that are nonexistent. 

For example, a Central Ohio consumer received a call saying she qualified for a loan worth up to $5,000. In order to receive the loan, she first had to send $300 via wire transfer to India. She sent the money, but never received the loan. It was all a scam.

In an advance fee loan scam, con artists ask for upfront fees in exchange for a loan or line of credit. Victims often are asked to wire money to another country to secure the loan. After sending the money, however, victims receive nothing.  

Since January 2011, the Ohio Attorney General’s Office has received more than 100 complaints about advance fee loans or advance fee credit cards. While some of the complaints involve disputes against legitimate businesses, many represent scams.  

Requests for wire transfers in exchange for a loan almost always signal a scam. 

Signs of an advance fee loan scam include:

  • Calls or e-mails offering loans
  • Claims of “guaranteed” loans or lines of credit
  • Demands for advance fees, such as a “bank processing fee”
  • Requests for money sent via wire transfer
  • Companies that fail to provide loan information in writing 

In a related scam, consumers are contacted by “debt collectors” who demand payment on past-due loans. Consumers who receive these calls frequently say they had applied online for a payday loan but never received the loan and do not owe the money.  

Sometimes the callers threaten consumers with arrest or jail time if they refuse to pay.  

If you receive calls demanding that you pay a debt, tell the callers to provide written verification of the debt. If they refuse, don’t trust them and don’t send any money. The law requires debt collectors to provide verification that you owe a debt.





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