There is a lot of talk about “debt consolidation.” Some individuals and families are tempted by “advance fee loans,” or other schemes that market themselves as consolidation resources. Be warned and be cautious! Here are a few tips and insights . . .
1. What is an “advanced fee loan?” Why do you consider them a scheme to defraud people from their money? Advanced fee loan schemes typically target those who can least afford to lose their $$ -- unemployed, fixed incomes, those with big debts . . . they promise guaranteed, low interest loans . . . they charge large amounts of money for upfront application processing fees . . .
2. Where do these so-called loan brokers market their loans? Newspapers . . . magazines . . . online . . . targeting vulnerable consumers and business owners with poor credit, knowing that the loans will be declined, but will keep the upfront processing fee.
3. How can someone protect themselves against advance fee loans schemes? Seek credit locally before going cross country or out of country . . . don’t act immediately – get the paperwork first, understand it thoroughly . . . get references and investigate them . . . ask yourself, “If I can’t get a loan locally, why is this company, which I have never heard of and doesn’t know me, willing to make me a loan?”
Victimized?? Complain!! Contact the BBB 24 hours a day at (409) 835-5348 (800) 685-7650 www.bbb.org