Legitimate lenders never “guarantee” or say that you are likely to get a loan or a credit card before you apply, especially if you have bad credit, no credit or a bankruptcy.
BBB reminds consumers and small businesses with credit problems to avoid advance-fee loans, which are often scams.
Sure signs of an advance-fee loan scam:
• The lender asks you to wire money or send a money order — such as for insurance or collateral — before you can receive the loan. You might be told to wire money to another country, another red flag.
• Pressure to act immediately. Advance fee loan schemers will try to get you to send money or give out personal information (credit card number, bank account information and Social Security number) before you get any paperwork. Insist on receiving the necessary paperwork before deciding whether to apply for credit.
• A lender who isn't interested in your credit history. A lender may offer loans or credit cards for many purposes — for example, so you can start a business or consolidate your bills. But one who doesn’t care about your credit record should worry you. Ads that say “Bad credit? No problem” or “We don't care about your past. You deserve a loan” or “Get money fast” or even “No hassle — guaranteed” often indicate a scam. Legitimate lenders generally evaluate credit worthiness and confirm the information in an application before they grant firm offers of credit to anyone.
• Fees that aren't disclosed clearly or prominently. Scam lenders may say you've been approved for a loan, then call or email demanding a fee before you can get the money. Any up-front fee that the lender wants to collect before granting the loan is a red flag.
• A loan that is offered by phone. It is illegal for companies doing business by phone in the U.S. to promise you a loan or credit card and ask you to pay for it before they deliver. But remember, just because it is illegal doesn’t mean fraudsters don’t make the offer.
• A lender who asks you to wire money or pay an individual. Don't make a payment for a loan or credit card directly to an individual. In addition, don't use a wire transfer service or send money orders for a loan. You have little recourse if there’s a problem with a wire transaction, and legitimate lenders don't pressure their customers to wire money.
• The lender is not registered in the state to do business. Check with the Louisiana Office of Financial Institutions at 225-925-4660 or their website at ofi.state.la.us for more information on licensing.
• Will not provide location information. If the loan broker hesitates to tell you his physical location, beware that this is a common ploy to avoid law enforcement detection. Refuse to do business with the broker until you have their physical address or location and can check them out with the BBB.
Start with Trust®. Check with the BBB before doing business.
BBB works for a trustworthy marketplace by maintaining standards for truthful advertising, investigating and exposing fraud against consumers and businesses.
BBB of Acadiana services the parishes of Acadia, Evangeline, Iberia, Lafayette, St. Martin, St. Landry and Vermilion.