ATLANTA, Ga. (CW69 News at 10)
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The Attorney General’s Consumer Protection Division has received a number of complaints recently from consumers who have received a scam call informing them that they have been pre-approved for a loan – in some cases, for as much as $30,000. The scammer then says that in order to receive the loan, the consumer will first need to send approximately $500 to the business for “loan fees,” typically via cashier’s check, wire transfer or GreenDot MoneyPak. After sending the money, consumers may be told they need to pay an additional loan fee of approximately $900 before receiving the money. The consumers never receive the loan money and are unable to get refunded for the fees they paid.READ MORE: New Federal COVID-19 Vaccine Site Opens In Tampa
“Many people are struggling financially right now, and scammers are all too happy to use this as an opportunity to exploit vulnerable consumers,” cautioned Attorney General Carr. “The best protection for consumers is to learn how to spot a scam, and we’re here to help.”
Scam artists also try to lure victims through online ads that urge consumers with poor credit to call a toll-free number or go to a website that may look legitimate. Scammers may even provide consumers with a phony loan application and fake loan approval documents to add credibility to the scheme. Despite these tactics, consumers can easily avoid these scams by remembering that reputable lenders will not charge you an up-front fee for a loan. Legitimate lenders make their money via the interest you pay on the loan, not through fees. Even if a loan does come with a processing fee, the lender should deduct that fee from the loan amount or roll it into the total amount you will need to repay via monthly installments, rather than making you pay up-front.MORE NEWS: Stimulus Check Latest: When Could You See Another Economic Relief Payment?
The Consumer Protection Division offers the following tips to help you recognize and avoid a loan scam:
- Never pay money up-front for a loan. This is a major red flag! Legitimate offers of credit do not require an up-front fee. Any fees are generally taken from the amount borrowed after the loan is approved.
- Never wire money or pay with a prepaid card. Not only is this an indicator of a scam, but if you pay via one of these methods, it is nearly impossible to get your money back if the lender turns out to be a fraudster.
- Don’t fall for promises that you’ll get a loan regardless of your credit record. Legitimate lenders do not guarantee you will receive a loan until they have first checked your credit history, especially if you have poor credit or haven’t established a credit record yet.
- Research the company carefully. Make sure the company has a legitimate street address and phone number by verifying it with directory assistance. Avoid companies who use a post office box as their corporate address or who can only be reached by leaving a message on an answering machine or with a call-center operator. Check out the company with the Better Business Bureau to see its rating and whether there have been complaints lodged against it.
- Don’t make payment to an individual instead of a company. A legitimate lender should never ask you to do this.