Advance fee loans are a common type of scam in the fraud industry. Con artists will frequently advertise on radio, newspapers and television, claiming to offer loans to individuals and businesses in exchange for an advance payment. These advance payments are usually a small amount in comparison to the loan being offered.
How Can I Protect Myself?
Individuals and businesses should undertake several steps before paying an advance fee for a loan. These steps include:
- Discovering what company is offering this loan. It is important to determine whether the company offering loans is legitimate and exists. This can be accomplished by contacting a local consumer protection agency.
- Never giving social security numbers, credit card information, or other personal or financial information over the phone. A loan institution that claims to need this information over the phone could be ready to withdraw money from your account immediately.
- Being cautious about 900 numbers because part of the loan scam could be high charges over the phone call itself.
What Should I Do If I Become a Victim?
Advance loan scam victims are unfortunately left with few options. However, reporting advance loan scams to certain state and federal government agencies can help future consumers from falling into the same trap. The following agencies can be contacted:
- Federal Trade Commission
- State Attorney General
- Consumer Protection Agencies
Additionally, it is important to immediately contact your financial institutions to put a hold on all pending transactions to prevent further withdrawals. However, by the time that you have caught onto the fact that you have fallen victim to a scam, the damage probably has already been done.
Should I Contact an Attorney?
An experienced attorney might be able to help a victim of advance fee loan scams. A victim, if able to locate the fraudulent loan institution, can bring a cause of action and attempt to recover any money lost. In addition, a lawyer might be able to help you work with your legitimate financial institutions regarding future steps to payback or forgive some of your existing debt.