Wallets Get Fat From Risky Business:
Wheeler-Dealer’s Pitches leave some empty Handed. Big Money Is Pocketed In Schemes . Don’t Get Duped

reprint and distribution courtesy of http://www.detroitinvestmenthomes.com/

CONSUMER ALERT
MIKE COX
ATTORNEY GENERAL
The Attorney General provides Consumer Alerts to inform the public of unfair,
misleading, or deceptive business practices, and to provide information and guidance on
other issues of concern.

ADVANCE-FEE LOAN SCAMS
Advance-fee loan or credit card scams are often targeted at people with bad credit. The
scam may start as an ad in the paper, "Bad credit no problem – loans available by calling
1-###-###-####." The consumer is told, "You are qualified, but you must send a fee to
process your application/pay a security deposit/pay for insurance." The victim pays the
money, and no loan or credit card is issued.

RECOGNIZING THE SCAM
The ads offer easy access to loans, regardless of credit history. The advance-fee scammer
may use a false business name and address, often with toll-free 800, 866 or 877 phone
number that is difficult to trace or rings into Canada. Sometimes the scammer will even
use a legitimate company's name or physical office address in the ad. Placement of an ad
in a recognized media outlet does not guarantee that the company placing the ad is
trustworthy.

Consumers calling in response to such ads are taken through a phony application process,
sometimes over the phone or through faxed application forms, and later may receive fake
loan approval documents. In order to receive the approved loan, applicants are directed
to pay money up-front, under the guise of an application fee, a security deposit, for credit
insurance, some other collateral payment, or other service fee. Often, the applicant is
directed to send the payment via wired money transfer, payable to an individual rather
than a business.

Consumers filing complaints with the Michigan Attorney General's Consumer Protection
Division have been directed to wire payments to Canadian addresses. After sending
payment, the loan is never received, and refund attempts are futile. Making matters worse, some scammers have used the information collected from advance-fee loan victims to commit identity theft.

PROTECT YOURSELF: TIPS TO AVOID ADVANCE-FEE LOAN SCAMS
Don't pay for the promise of a loan. While legitimate lenders may charge you a small
amount to process your application and cover the cost of checking your credit, the fees
generally are taken from the amount borrowed. Legitimate offers of credit do not require
an up-front payment.

Ignore any ad, or hang up any caller, that guarantees a loan in exchange for an upfront
fee. Legitimate lenders never guarantee that you will receive a loan before you
apply or before they have checked out your credit status or contacted your references,
especially if you have bad credit or no credit record. Be wary of anyone who tells you
that they can provide loan approval by reviewing information you give over the phone
without a credit check or who says you qualify for a loan at a competitive rate regardless
of your credit history.

Thoroughly investigate loan offers from unfamiliar companies. Ask for the
company's physical location. Check the company's number in the phone book or from
directory assistance, and call it to make sure that you are dealing with the company you
think you are. Check the lender out with the Better Business Bureau. Check out
questionable ads by calling Project Phonebusters in Canada toll-free at 1-888-495-8501.
Don't wire money or send money orders for a loan. You have little recourse if there's a
problem with a wire transaction. Legitimate lenders don't pressure you to wire funds.
Refuse to do business with anyone who encourages you to send money or act
immediately.

Don't make payment to an individual for a loan. No legitimate lending institution
would make such a request.

Steer clear of advance fee offers that promise a credit card with a pre-approved
limit and low interest rates for a fee. To pay the fee, you will be asked to give your
bank account information and authorize an electronic draft to pay the fee. In most cases,
the credit card never materializes, and the consumer's bank account is quickly drained.

FILE A COMPLAINT

Consumers who fall victim to an advance payment loan or credit card scam should
contact the media source that advertised the bogus offer. Responsible advertisers will
terminate these ads and contact law enforcement. Since most advance-fee loan scams
involve a victim in one state and a scam artist in another, report the problem to the
Attorney General's Consumer Protection Division at:
Consumer Protection Division Toll Free: 877-765-8388 www.michigan.gov/ag (online complaint form)