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: