South Dakota Addresses Used in Advance Fee Loan Scheme

Better Business Bureau (BBB) serving Nebraska, South Dakota, The Kansas Plains and Southwest Iowa is warning consumers of a scam where phony lenders are making false promises to borrowers seeking loans in exchange for upfront fees.
May 15, 2014

BBB has received complaints from consumers who were victims of a Jamaican scam in which the lenders demanded cash up front and never provided the loans. The names being used in this scam are USA Cash Advance and Payday Loans of America.

Complainants state that according to the information they received, this business was located at 604 E North St in Rapid City, SD. Another address associated with this company is 2138 S Minnesota Ave in Sioux Falls, SD. One person paid $295, and another reported that she had sent $16,000 to this company. They were both asked to use Green Dot MoneyPak cards to transfer the “required” fees.  None have received their loans or were they able to cancel them. The company just keeps asking for more money to process their refunds.

According to BBB President Jim Hegarty, “Unfortunately, many times the borrowers who fall into these traps don't have many options because of their poor credit history or lack of collateral. Any time someone asks you pay in advance for a loan, it's a scam because charging an advanced fee for a loan is illegal.”

A BBB investigation found that neither of addresses in South Dakota for the company were valid, and when the phone number, provided by the consumers, was called, a man with a heavy accent answered. He offered the investigator a loan and immediately sent an email stating, ”For $5,000 your monthly installment will be $242 for 24 month and we are located in 2138 s Minnesota AVE Sioux FALLS Sd 57103.”  The investigator then received a phone call from a Jamaican phone number. The caller stated that he had her $5,000 loan even though she had not applied for a loan nor had she provided anything other than a phony name, email address and phone number.

Here's how the alleged scam works: Consumers apply and get "approved" for loans online. They are then asked to "secure" the loan by paying fees under the guise of a variety of names such as interest fees, collateral or insurance costs on the loan or a broker's fee. Consumers are then told to transfer the cash via Western Union or to purchase re-loadable prepaid card like Green Dot MoneyPak. “In many cases, the lender comes back multiple times asking for fees,” said Hegarty. “The ‘lenders’ never give out the loan. They disappear, shutting down their website and disconnecting their phones.”

BBB offers the following advice to avoid being taken by these scams:

  • Be very suspicious of advance fee loan calls. Even if the loans are real, interest rates can be extremely high or the business can be an outright scam. Always do business with local companies with brick and mortar locations when possible.
  • Don’t let the promise of extra cash or lower monthly payments get in the way of your good judgment about whether the cost you will pay for the loan is really worth it. (Know how much the loan will cost you at the date of pay off.)
  • Be extremely cautious when giving out any personal information online such as Social Security and bank account numbers. Be alert for websites that force you to give that information before even telling you whether you qualify for a loan.
  • Never wire money. Scammers pressure people to wire money through commercial money transfer companies or to load money on Green Dot cards because wiring money or giving out the number on the card is the same as sending cash. When the money’s gone, there’s very little chance of recovery. Con artists recommend these services so they can get their hands on your money before you realize you’ve been cheated.
  • Always check with BBB at before doing business with any firm.