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Always avoid fraudulent lenders who demand advance fees: Better Business Bureau

Posted by Juanita Bratcher On September - 29 - 2011

 

(A Message from the Better Business Bureau)    

 

Chicago, IL – The Better Business Bureau serving Chicago and northern Illinois (BBB) is warning consumers and business owners to avoid loan companies that require or request money upfront to pay service charges for a loan. Charging an advance fee for a loan is a scam that takes money from individuals or businesses that, many times, do not have extra money to lose.  

These scams target individuals who are having trouble obtaining cash or credit. Customers may be lured by advertisements and direct mail pieces promising “guaranteed” loans or credit cards, regardless of credit history. BBB data shows over the past 12 months that Advance Fee Lending complaints have gone down, but inquiries have gone up which is a key component of people checking on a company before doing business with them.

“In desperate times people are willing to go to lenders for fast cash to pay off their debts or mortgages,” said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and northern Illinois. “It’s important to know that you are dealing with a reputable lender so you don’t end up losing money. The advance fee loan scams could be solved if consumers stopped paying these fees which are illegal in Illinois.”

Carlos Valiente of Chicago states, “They told me that they could reduce my mortgage by around $700 a month with no fee. Then they asked for $5000. I asked about their promise of no fee. They asked me if I expected to get something for nothing and said that was their fee that would go to the bank. I have asked for a refund and have not gotten the loan or my money back.”

The following are signs that you may be dealing with a fraudulent lender:

  • Legitimate lenders never ask you to pay for processing your application in advance. One exception is real estate; it is accepted and normal practice for lenders to request payment for a credit report or appraisal.
  • Legitimate lenders never “guarantee” to get you a loan or credit card before you apply, especially if you have bad credit, no credit or have declared bankruptcy in the past.
  • Never give your credit card number, bank account information or Social Security number out over the phone or Internet unless you know with whom you are doing business. If you do not have the offer confirmed in writing and are asked to pay, DO NOT DO IT!
  • Remember, if you cannot obtain money or credit from conventional, local sources such as banks and credit unions, it is unlikely that a classified advertisement, telemarketer or 800 number from a non-local business can provide you a legitimate offer.
  • The lender asks for premium, insurance, or collateral payments, frequently saying that this is due to consumer having low credit score.
  • The lender asks for the payment to be wired via Western Union or Money Gram to locations in Canada.
  • Just because a company advertises in a recognized media outlet does not mean the company is 100% legitimate.

For more information on how to avoid scams, visit www.bbb.org

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Welcome to CopyLine Magazine! The first issue of CopyLine Magazine was published in November, 1990, by Editor & Publisher Juanita Bratcher. CopyLine’s main focus is on the political arena – to inform our readers and analyze many of the pressing issues of the day - controversial or otherwise. Our objectives are clear – to keep you abreast of political happenings and maneuvering in the political arena, by reporting and providing provocative commentaries on various issues. For more about CopyLine Magazine, CopyLine Blog, and CopyLine Television/Video, please visit juanitabratcher.com, copylinemagazine.com, and oneononetelevision.com. Bratcher has been a News/Reporter, Author, Publisher, and Journalist for 33 years. She is the author of six books, including “Harold: The Making of a Big City Mayor” (Harold Washington), Chicago’s first African-American mayor; and “Beyond the Boardroom: Empowering a New Generation of Leaders,” about John Herman Stroger, Jr., the first African-American elected President of the Cook County Board. Bratcher is also a Poet/Songwriter, with 17 records – produced by HillTop Records of Hollywood, California. Juanita Bratcher Publisher

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