The Advance Fee Loan Scam
24 August 2006Looks like it’s not just Nigerian scammers targeting gullible U.S. consumers anymore. Some Canadian ones have gotten into the act, as reported by Creditbloggers here. It’s a new scam called the Advance Fee Loan Scam. The FTC has a warning page up here that you can take a look at, but the basics are that fake lenders will cold-call you offering to make you a loan. They have very official looking papers and a lengthy process you have to comply with - and just before giving you the loan, they’ll ask you to send an advance fee of several thousand to pay the fees on the loan to a Canadian bank account. When you do - they disappear.
Often these schemes are actually advertised in the newspaper, according to the FTC:
According to law enforcement agencies in the U.S. and Canada, ads and promotions for advance-fee loans suggest — or even “guarantee” — that there’s a high likelihood that a loan will be approved, regardless of the applicant’s credit history. But to take advantage of the offer, the consumer has to pay a fee. The catch? The scam artist takes off with your fee, and the loan never materializes.
Many advance-fee loans are promoted in the classified sections of daily and weekly newspapers and magazines. Often, the ads feature toll-free 800, 866, or 877 numbers, or area codes from Canada, such as 416, 647, 905, or 705. The loans also are promoted through direct mail, radio, and cable TV spots. The fact that an ad is in a legitimate media outlet — like the local newspaper or radio station — doesn’t guarantee that the company placing it is trustworthy.
The scammers try to play on a false notion that Canadian lenders are somehow more willing than U.S. ones to lend to people with bad credit - when in reality the standards are roughly the same. They also play on ignorance - anyone willing to give you a loan will be willing to put any fees into the balance of the loan, and legitimate lenders don’t ask you for a fee up front. They WANT it paid out over time because then they earn interest, too. So if anyone ever offers you a loan, if you’ll only pay some money first - hang up the phone.
Discuss this on the Free the Drones Financial Forums.
2 Responses to “The Advance Fee Loan Scam”
January 11th, 2007 at 12:11 pm
I have just become a victim of Melissa Sadoh, with the promise of a GUARANTEED LOAN from Nigeria….She constantly requested payment upon payment for things such as ‘loan insurance’, ‘loan tax’, etc…..The list goes on…she preys on those less fortunate, DEFRAUDS them of every cent they have to their name…..
I caution everyone to beware of any ‘GUARANTEED LOAN ads, especially those offering a yahoo.com email addresses to contact. They would rather you did not contact them via the website their ad is listed on, but only through this yahoo.com e mail address……
February 23rd, 2007 at 2:21 am
I want everyone/anyone to BEWARE of the Nigerian Advance Fee Fraud as mentioned above. I have just been defrauded of $1000.00 CAD by Mrs Melissa Sadoh. She took every cent I had, then removed herself from the situation when it was time to be receiving my promised ‘transfer loan’ via Western Union. Another individual entered the matter, Dr. Wale Adesui, first posed as an agent with Economic & Fincance Crimes Commission, then asked me if I still wanted this promised loan. When I informed him that I knew he was a fake, he just LAUGHED at me in a ‘verbal’ manner. Please everyone, be careful with these kind Nigerian folks, they will rob you blind in a very cold, cruel manner………