BBB Issues International Alert Warning of Surge In Bogus Loan Websites

“Lenders” Boldly Promise Loans, No Matter What Your Credit History

Austin, Texas - January 25, 2007 The Better Business Bureau system warns of a proliferation of Web sites that are impersonating legitimate lenders to steal money from consumers.

Victims across the U.S. and Canada report losing money, sometimes more than $1,000 each. The Web sites in question promise loans to anyone, regardless of the person’s previous credit history.

“People with the poorest finances are being victimized. Many mistakenly believe they have no other option,” said Carrie A. Hurt, President & CEO of the Better Business Bureau serving Central and South Central Texas.

According to BBB experience, victims used Internet search engines to locate lenders that “guaranteed” low-interest rate loans for people with bad credit histories. After submitting the online loan application, they were contacted by a company “representative” who said they were approved.

Before they can receive their loan funds, however, they must first pre-pay a fee. The loan applicant is told to wire the money or send a money order, usually to a location in Canada. The consumer never receives the loan and cannot recover their money. They also risk having their identity stolen if they provided their Social Security number or bank account number.

“These bogus lenders are clever. They use a variety of tools to imply legitimacy,” Hurt warned.

• Intrest (sic) Plus Financial used a Milwaukee address that was home to a legitimate company, not affiliated with the scam lender.
• Statewide Capital Group, falsely claimed to be located in Omaha, and presented a sophisticated Web site offering a variety of lending services at low rates.
• Lloyds Financial Group used a false street address in East Peoria. Its Web site promised debt consolidation, personal loans and business loans “regardless of the person’s previous credit history.”
• Home Guard Funding Ltd. (a.k.a. Principal Investments) used a name similar to that of a legitimate Canadian mortgage broker and an address belonging to a Zion, IL law firm that had no connection to the lender.
• City Financial Corp. (a.k.a. PeachState Financial Services) fraudulently claimed the BBB of Central Georgia’s address in Macon as its own.

Advance fee loan scams are illegal in the U.S. and Canada! To avoid law detection, fraudulent loan operators move quickly, frequently reopening under new names.

“If you have trouble qualifying for a loan, you do have options. There are nonprofit organizations in every state with trained credit counselors who can assist individuals with debt problems. Contact your local BBB (www.bbb.org) for tips on selecting a trustworthy credit counselor,” Hurt suggested.

BBB “Do’s and Don’ts” to Avoid Bogus Loan Web Sites

• DO NOT use online search terms like “bad credit loans” or “guaranteed loans” that may lead you to fraudulent sites.
• DO NOT wire money or send a money order to secure a personal loan. Legitimate offers of credit DO NOT require an up-front payment of a fee for collateral, processing, insurance, taxes or any other purpose.
• DO NOT do business with lenders that “guarantee” a loan before you apply.
• DO NOT do business with Web sites that refuse to provide a street address and a working telephone number.
• DO use the BBB to check if a Web site can be trusted. In addition to informing you of any complaints, BBB staff can visit the business location and conduct other research to verify a site’s legitimacy.
• If the site has a BBBOnLine seal, DO click on it to check the BBB’s report.
• If you are victimized by an advance fee lender, DO file a complaint with the BBB. While the chance of recovering the payment fee is minimal, your experience will help BBBs warn other consumers and assist government investigations.
  

About Better Business Bureau
The Better Business Bureau, Inc. serving Central and South Central Texas (BBB) was founded in 1950 as a non-profit membership organization. The mission of the BBB is to promote and foster the highest ethical relationship between businesses and the public through voluntary self-regulation, consumer and business education, and service excellence.

This Better Business Bureau is currently supported by approximately 6,900 member businesses and serves more than 3,000,000 consumers in its 52-county service area in Texas. These counties include: Atascosa, Bandera, Bastrop, Bell, Bexar, Blanco, Bosque, Burnet, Caldwell, Calhoun, Comal, Comanche, Coryell, Dewitt, Dimmit, Edwards, Falls, Fayette, Freestone, Frio, Goliad, Gonzales, Guadalupe, Hamilton, Hays, Hill, Jackson, Karnes, Kendall, Kerr, Kinney, Lampasas, LaSalle, Lavaca, Limestone, Llano, Maverick, McLennan, McMullen, Medina, Mills, Navarro, Real, San Saba, Travis, Uvalde, Val Verde, Victoria, Webb, Williamson, Wilson, and Zavala.