(contents courtesy of the Greater Cleveland Better Business Bureau)

Looking for Extra Cash for the Holidays? Better Business Bureau Warns Bogus Loans are not the Answer to Cash Shortages

November 2006 - What do I do? I sent these people $1,759.00 and I have nothing to show for it besides probably a repossessed vehicle and many other problems  that are going to come of this. I need that money back and to go on with my life.  Please Help Me!!!!

This e-mail from a Michigan woman is just one in a long string of complaints at the Greater Cleveland Better Business Bureau from consumers who have made the mistake of turning to advance fee loan companies for extra holiday cash.

Advance fee loan scams typically guarantee an applicant’s loan will be approved regardless of credit history and require unsuspecting victims to wire funds to pay for credit insurance or other products. After the funds are wired and the loan doesn’t arrive, the consumer is often told the insurance will cost more due to their poor credit history. Many consumers are duped into sending additional fees, still believing they will receive their loan, but to no avail.

In recent months, the BBB has seen a dramatic increase in the number of advance fee loan scams that hide behind addresses of legitimate local companies. At least nine scams have been identified by the BBB that use Cleveland addresses but are believed to be located in Canada – three of these have hijacked the names and addresses of local businesses.

Premium Finance Associates (Premium), a Beachwood company that finances commercial insurance policies, began receiving calls in late September from consumers who claimed the company had ripped them off.  Premium’s owner found that its company name, street and websites addresses were being fraudulently used by B & T Financial Group, an Internet-based advanced fee loan scam.

Consumers who filed loan applications with B & T Financial Group received paperwork that appeared to come from Premium.  The paperwork included Premium’s address and website address along with the Ohio state seal and an unauthorized BBB logo.  Telephone and fax numbers listed in the paperwork, however, belonged to the perpetrators of the scam.

Applicants wired advanced fees ranging from $500.00 to $1,000 to Canada for insurance to cover their loan payments in the event of death, unemployment or disability. When the funds did not arrive and their calls were ignored, they found their way to Premium to complain. Premium’s owner has referred callers to law enforcement agencies for assistance and posted a notice on its website that it does not offer loans.

The Better Business Bureau offers these tips to loan seekers:

Many loan seekers turn to the internet when local banks and lending institutions turn them down.  If the loan is offered on the Internet, be sure you know the company’s true name, location and telephone numbers. You can use an online  “whois” tool like www.betterwhois.com to find this information. By entering the company’s website address into this tool, you can obtain the name, address and phone number of the person who registered that particular website address. Some companies do not want you to have these details, and register their website addresses with a “proxy” service that will keep this information confidential. Steer clear of any companies that are not willing to reveal this information.

Never wire money or send money orders to receive a loan. The Telemarketing Sales Rule makes it illegal for companies doing business by phone in the U.S. to ask for advanced fees for guaranteed loans.

Ohio requires loan brokers to be licensed with the Ohio Department of Commerce. You can verify licensing at www.com.state.oh.us or (614) 728-8400.

Be leery of offers that claim your loan is guaranteed, regardless of your credit history.

Don’t give your credit card, bank account, or Social Security number on the telephone, by fax, or via the Internet unless you are familiar with the company and know why the information is necessary.

Check the BBB’s report on the company. You can get reports online at www.ClevelandBBB.org or by calling 216- 241-7678 or 800-233-0361.

The Better Business Bureau since 1913 has advocated ethical, responsible conduct in the marketplace. Through the support of business members sharing its goals and standards, the BBB offers programs which promote informed buying and giving decisions, truthful advertising and selling practices, and the resolution of marketplace disputes.