Beware of Advance Fee Loans
You may have seen advertisements promising easy access to loans, even if you have bad credit. These advance fee loan scams try to take advantage of consumers with poor credit histories. They’ll try to get you to pay them for help getting a loan, but once you pay you never get the loan.
To steer clear of advance fee loan scams, read the following tips:
• Watch out for loan brokers who promise or suggest that they can get a loan for you if you pay an up-front fee. Under Mississippi law, it’s illegal for a loan broker to charge an advance fee to obtain a loan or a credit card for a consumer.
• Beware of anyone who says they can decide to give you a loan over the phone without a credit check, or who says you qualify for a loan at a competitive rate regardless of your credit history.
• Avoid any loan that requires a large up front payment. Legitimate lenders will not charge you money up-front. Typically, advance fee loan schemes claim that you must make the first and last monthly payments or pay five percent of the principal so that you won’t lose the loan to others who are competing for it. Don’t agree to pay anything until after the loan has closed.
• Don’t do business with anyone who encourages you to send money immediately or offers to pick up the payment or pay for you to send it by overnight mail. Once you pay, the scammer is likely to disappear with your money and you won’t get a loan.
• Steer clear of advance fee credit card offers. Scammers also offer credit cards with pre-approved limits and low interest rates for an upfront fee. You’ll be asked to give your bank account information and authorize an electronic draft to pay the fee. In most cases, the scammers take your money and you never get a credit card.
We Can Help
If you have a complaint about an advance fee loan scam contact us toll free within Mississippi at 1-800-281-4418, or direct at 601-359-4230 if you are elsewhere.