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Better Business Bureau ®
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Nebraska, South Dakota, The Kansas Plains and Southwest Iowa
BBB's Name Used to Entice Consumer to Pay an Advance Fee for a Personal Loan
April 18, 2014

Better Business Bureau (BBB) serving Nebraska, South Dakota, The Kansas Plains and Southwest Iowa is warning cash-strapped consumers to beware of online lenders that require advance fees.

“Desperate times are leading people to the Internet to apply for loans and many are falling deeper into debt after getting tangled up with fictitious lenders who have little regard for the law,” said BBB President and CEO Jim Hegarty. “Consumers nationwide continue to be victimized by sophisticated loan scams that demand up-front fees for personal loans that are never delivered.”

An Arkansas City, KS woman, who has a history of searching for loans online, recently received a phone call from United Personal Only. She was informed that “they already had her bank account number on record and she qualified for a $5,000 loan that could be repaid at the rate of $141 per month.”  The caller stated that United Personal Only is located in Houston, TX and is “listed with the BBB.” 

Then, the consumer was told that she would need to pay $300 in advance to demonstrate that she was able to pay the loan back “because the BBB likes people to show that they can make payments on time.” 

As instructed, the woman went to a Walmart and put $300 on a re-loadable pre-paid card called a Green Dot MoneyPak. She thought that she was setting up an account that would be used to transfer her loan payments.  She was unfamiliar with how a Green Dot MoneyPak works and did not know that when she gave the caller the numbers on her card, the money could be accessed immediately. Such Green Dot transactions are extremely difficult to trace. Other phony loan companies have used Western Union or MoneyGram to obtain the payments.

After releasing the numbers, the woman was notified that United Personal Only needed more money for “insurance.”  That’s when she contacted BBB. Although she closed her bank account, she is receiving numerous loan applications through emails and up to 6 phone calls per day from other online loan companies.

BBB investigators believe that United Personal Only is a fictitious business. It uses the same phone number as another company, United Personal Loans, which also appears to be fictitious. They claim to be located at 10970 West Hammer Road in Houston, but BBB has learned that this address is invalid. “When setting up this phony company, the scammers probably used the name West Hammer Road because it sounds like Westheimer Road which is an actual street in Houston,” said Hegarty. “The address is meant to sound legitimate, when it is not.”

 “The bottom line is that it is illegal for companies to promise you a loan and ask you to pay fees in advance,” added Hegarty. “Also, if you are handing over your personal information to get a loan without doing your research, you could be setting yourself up to have your account drained by offshore scammers.”

If looking for a personal loan, BBB has the following advice:

  • Be wary of applying for online loans through unfamiliar businesses or websites. Many of these online application sites are run by scammers or by people who sell your information to scammers.
  • Understand that requiring fees be paid as a condition of receiving a loan is illegal.
  • Do not do business with anyone who cannot give you an address that you can confirm as legitimate.
  • Read any contract carefully and make sure you understand all requirements before entering into any agreement.
  • Official-looking loan documents and sophisticated looking websites are easy to copy or fake. Just because a business appears legitimate, doesn’t mean it is.

Check for a BBB Business Review by going to bbb.org or call 800-649-6814.