Avoid Advance Fee Loan Scams Using Green Dot MoneyPaks

January 30, 2014

Consumers nationwide continue to be victimized by sophisticated loan scams that demand up-front fees for loans that are never delivered, the Better Business Bureau (BBB) warns.

In the past few weeks, thieves using fabricated addresses across the country have stolen tens of thousands of dollars from unsuspecting borrowers, many of them desperate for money to help pay bills, buy medicines or forestall home foreclosures.

Kelvin Collins, BBB president and CEO, said the loan schemes victimize desperate people who go online searching for a loan.

“The people who do this are the worst kind of vultures,” Collins said. “These people are constantly on the lookout for families who are struggling financially. Once they find victims, they will do whatever they can to strip them of what little they have.”

In the most recent loan scam, thieves are using the name and address (Blazer Financial Services) of a former loan company that has been out of business in the Macon area for many years. Similar scams around the nation have used hundreds of company names and addresses to dupe consumers. “These scams also hurt the business community by stealing their company name or using names that are very similar,” added Collins.

In virtually all cases, the consumer said he or she applied for a loan online and was contacted by phone or email by a person representing the phony loan companies.

Scammers demand that consumers take out insurance coverage on the loans by loading cash onto Green Dot MoneyPak cards and then forward the thieves the access codes. Usually, the thieves initially demand between $600 and $3,000 to secure the loan. After receiving the first payment, the scammers typically demand additional payments until their victims run out of money or catch onto the scam.

Such Green Dot transactions are extremely difficult to trace. Other phony loan companies have used Western Union or MoneyGram to obtain the payments.

The scammers make use of authentic-looking loan documents and elaborate temporary websites to convince consumers of their legitimacy. It is illegal for any company making loans by phone to take up-front fees.

Historically, the phony loan businesses change the names and address of their businesses every two to three weeks in attempts to keep a step ahead of law enforcement, the BBB and angry victims.

The BBB offers the following advice when looking for a personal loan:

  • 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.
  • Do not send money by wire-transfer or prepaid debit card. Once the money is sent, you have very little recourse.
  • Understand that any business operating by phone and charging insurance or other fees in advance of making a loan is operating illegally.
  • 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 www.bbb.org or call your local BBB office.

If you’ve been victimized by an advance-fee loan scheme, you can file complaints with the:

· Federal Trade Commission at www.ftc.gov.

· Internet Crime Complaint Center (iC3) at www.ic3.gov if the scheme occurred online or by e-mail.

· Your State’s Office of Consumer Protection or Attorney General’s Office.

· Better Business Bureau at bbb.org.

If you were asked to wire money to Canada, file a complaint with Canadian law enforcement by calling toll free: 1-888-495-8501 or e-mail: info@phonebusters.com.

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The BBB of Central Georgia & the CSRA, Inc. is a non-profit organization serving 36 counties in Georgia and 5 counties in South Carolina. The first BBB was founded in 1912. Today, BBBs serve communities across the U.S. and Canada.

Serving as the 'ethical gatepost' of our communities, BBB fosters and promotes ethical business practices and self-regulation standards that build consumer trust in the marketplace. BBB services include business reliability information, complaint resolution services and consumer and business educational information. More information is available at