No Credit? Bad Credit? BBB Warns Beware of Loan Scams

June 16, 2010

DAYTON, OHIO, June 11, 2010 - According to complaints filed with your Better Business Bureau, victims across the country have lost a total estimated quarter million dollars to advance fee loan scams this spring. Advance fee loan scams target individuals and small business owners desperate to get loans and often take victims for thousands of dollars.

Despite recent improvements, the economy continues to provide a great opportunity for scammers to take advantage of struggling individuals and small business owners. Lending standards remain stringent at most banks and many cash-strapped people are turning to fraudulent lenders promising loans regardless of credit history.

“Schemes preying on people looking for loans aren’t new and they’re flourishing in an economy when so many are struggling to get by,” said John North, BBB president and CEO. “Complaints received by your BBB are only the vocal few and we know from experience many more people across the country are falling for this scam every day—just when they can least afford it.”

Your BBB has recently received complaints about advance fee loan scammers operating under more than 75 different names, including Capital Alliance Financial Group, Harford Financial Services, Howard and Clark Financial, Lending Hand Financial, among others.

Most people stumble upon the scams online or learn about the bogus loan offers from ads in local Thrifty Nickel publications and online through classified sites, like Craigslist. Often, an advance fee loan scam Web site will be created and taken down within a couple weeks only to be replaced by another operating under a different name and fake business address.

The Web sites look professional and might even put the victim through the rigors of filling out loan application forms—often requiring the victim’s bank account and Social Security numbers. Eventually victims are told they’re approved for loans and just need to pay as much as thousands of dollars upfront via money order or wire transfer to pay for insurance or collateral. Those who pay never get the promised loans and are even sometimes tricked into giving the scammers more money.

Your BBB advises cash-strapped individuals and small business owners to recognize the following red flags of advance fee loan scams:

· The lender has a bad reputation—or none at all. Most trustworthy lenders have established track records. Be wary if you can’t find much information about a lender online. Research lenders thoroughly online and with your BBB. Visit or call (937) 222-5825 or (800) 776-5301.

· The lender isn’t registered with the state to do business. Check with Ohio’s financial or banking regulators.

· The lender asks you to wire money or send a money order (for insurance or collateral) before you can receive the loan. You might be told to wire money to another country, another red flag.

If you’ve become a victim of an advance fee loan scam, contact your Better Business Bureau and report the incident to your police department. If you were asked to wire money to Canada, file a complaint with Canadian law enforcement by calling toll free (888) 495-8501 or e-mail

About Your BBB Serving Dayton and the Miami Valley

Your BBB is an unbiased nonprofit organization that sets and upholds high standards for fair and honest business behavior. Businesses earning BBB Accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. Your BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM and educational information on topics affecting marketplace trust. To further promote trust, your BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 126 BBBs serve communities across the U.S. and Canada, evaluating and monitoring nearly 4 million local and national businesses and charities. Your BBB serving Dayton and the Miami Valley serves Montgomery, Greene, Clark, Darke, Miami, Preble, Shelby and northern Warren counties. Please visit for more information about your BBB.