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Tips for Consumers: Alert: Advance Fee Loan Scams Blanketing the U.S.

Tips for Consumers
Alert: Advance Fee Loan Scams Blanketing the U.S.

The Better Business Bureau of Greater Maryland issued an international alert cautioning consumers about a surge in advance fee loan scams. BBBs from across the United States and Canada are receiving complaints from consumers who have applied for loans and paid money upfront, but never received the promised loans.
Consumers contacting BBBs state that they discovered the companies through their local newspapers. The ads offered loans of thousands of dollars regardless of the person's credit history. Once the loan application was submitted, the consumer received a letter indicating approval for a loan amount, usually in the range of $5,000 to $100,000. However, before the money could be released, the consumer was told to wire transfer up to $2,000 to cover "security and/or insurance" fees.
BBBs in Macon, Georgia, Grand Rapids, Michigan and Topeka, Kansas all reported advance fee loan activities in their service areas. In all cases, the companies claimed U.S. addresses, but directed consumers to wire money to locations in Canada. BBB investigations determined that the U.S. addresses were either false or did not exist.
One company, City Financial (not to be confused with CitiFinancial), fraudulently used the Macon BBB's address as its physical location. The Bureau discovered that an additional Macon address of 248 Tom Hill Sr. Blvd., Suite 433 was not a physical address, but a mail drop at a local UPS store. The Macon BBB further learned that box 433 was not an active mail box and had been vacant for a long period of time. The company is currently calling itself Peach State Financial Services, which is the same name as a legitimate financial planning business located in Jeffersonville, GA.
BBBs report that the names of other fraudulent advance fee loan companies include: Allied Mutual Brokers located at 920 S.E. Quincy, Topeka, KS; First Target Financial located at 6359 Lake Michigan Drive, Allendale, MI; and, Freedom Trust located at 859 Washington Avenue, Holland, MI, but with a Web site registered to a person in Canada.
"Unfortunately, these types of fraudulent operations move quickly and reopen under new names. The addresses provided by such companies are often false or non-existent. The BBB advises consumers seeking a loan to investigate thoroughly advertised offers from unfamiliar loan brokers, particularly those originating out-of-state or out-of-country," said Nicholas Greaves, president of the BBB of Greater Maryland.
The BBB urges consumers to avoid advance fee loan brokers. Be aware that legitimate lenders never "guarantee" or promise that you are likely to get a loan before you apply, especially if you have bad credit, no credit or a bankruptcy.
"Unfortunately, advertising in recognized media outlets does not guarantee the legitimacy of the company behind the ad. Check with the BBB before responding to any advertisement from an unknown business," Greaves said.
BBB experience indicates that the following are signs of advance fee loan fraud:
* Pressure to act immediately. Advance fee loan schemers will try to get you to send money or give out personal information (credit card numbers, bank account numbers, Social Security numbers) before you get any paperwork. Insist on receiving the necessary paperwork before deciding whether to apply for a loan.
* Will not provide location information. If the loan broker hesitates to tell you their physical location, beware; that is a common ploy to avoid law enforcement detection. Refuse to do business with the broker until you have their physical address or location and can check them out with the BBB.
* Questionable connections to established financial institutions. Many of these schemes are merely telephone sales operations, so no connection will exist to an established financial institution. Ask which lenders the "loan broker" deals with, and ask for the physical address of the lender. Then contact the Better Business Bureau of Greater Maryland to request information on the lender.
Those who fall victim to such loan scams are encouraged to file a complaint with the BBB ( While the chance of recovering the loan application or payment fee is minimal, victims can provide information that will help BBBs to warn other consumers and assist the government in tracking these scams.

To file a complaint visit: or write: BBB, 1414 Key Highway, #100, Baltimore MD 21230. Their office serves Baltimore and all of Greater Maryland.

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