News Release: For Immediate Release

www.bbbhou.org * bbbinfo@bbbhou.org * Council of BBBs: www.bbb.org *
24-Hour Information: 713-868-9500, 877-468-9222 (from area code 409 only)

Beware of Advance Fee Loan and Credit Card Fraud

Advance fee loan schemes typically target those who can least afford to lose their money - the unemployed, those on fixed incomes and those deeply in debt.

Despite the Better Business Bureau's (BBB) warnings, many consumers and small businesses continue to lose large sums of money to fraudulent loan brokers. These advance fee loan fraud companies advertise in local newspapers and free shopper guides and employ slick telemarketers to promote their scams. Consumers who answer such ads are told that their credit application can be taken over the phone and are asked for advance processing fees that range anywhere from $25 to hundreds of dollars. Once the advance fee is paid, the company keeps the fee and fails to process the loan application or to issue a credit card.

In the past several years, hundreds of fraudulent loan brokers have set up operations across the country and in Canada, targeting out-of-state victims, collecting their money and then, closing shop. Some have re-opened their doors under different names, hoping to bilk new borrowers while going after old victims for a second time.

Consumers and businesses should keep in mind that legitimate lenders never guarantee that you will definitely get a loan or a credit card before you apply - especially if you have bad credit, no credit or bankruptcy. If a telemarketer asks you to forward an up front fee for a "guaranteed" loan, hang up! Never give out your bank account or credit card numbers to any unfamiliar company over the phone. Be sure to check the company out with the BBB. Also, before signing for any loan, you should have a clear understanding of all terms in the written agreement.

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