Hopeful Borrowers Complain to BBB Alleging Advance Fee Lending Scams

August 15, 2013

The BBB Serving Metropolitan New York is alerting consumers to an increased number of complaints filed against companies that advertise guaranteed loans, regardless of credit history or collateral. Consumers allege that these companies, which claim to be operating in the Metro New York area, made false promises to arrange for a loan in return for fees paid upfront by the loan applicant.

“Despite a broker's assurances, would-be borrowers should understand that it is illegal for anyone to ask you to pay in advance for a loan or credit card,” said Claire Rosenzweig, President and CEO of the Better Business Bureau Serving Metropolitan New York. “In the cases filed with BBB, consumers alleged that scammers fraudulently pocketed the fees and made no effort to find the funds promised, leaving the financially strapped client in an even worse position; no loan and lost fees.”

In complaints filed with the BBB, consumers reported applying for and being approved for loans online. However, consumers claim they were then asked to “secure” the loan by paying additional fees. These fees, ranging from $150 to $500, were variously described as the first few months of payments, interest fees, collateral or insurance costs on the loan, or a lender or broker’s fee. Consumers report being instructed to transfer the fees to the company via Western Union or reloadable credit cards like Green Dot MoneyPak. In many cases, multiple rounds of fees are requested to release the funds.

According to the consumer complaints, none of them received the money from the loan, or a refund of the advanced fees that were paid. In many cases, the business has allegedly disappeared, shutting down their website and disconnecting the phone lines.

Since June, the BBB Metro New York has received advance fee loan complaints listing companies with the following names:

Bridgefield Financial Assets
Greenfield Professionals
Mondell Financial
EZ Quick Loans
PayDay for America
Maslow Credit Solutions

Consumers should always be wary of a lender who asks you to wire money, load a pre-paid debit/credit card, or pay an individual to obtain a loan. A consumer will have little recourse if there’s a problem with a wire transaction or the money is transferred from the reloadable card. Legitimate lenders don’t pressure their customers to wire funds, transfer money, or send them by courier. Potential borrowers should also be wary of a broker's assurances of unlimited loan sources and should not deal with an unlicensed lender.

The BBB also recommends consumers review the Federal Trade Commission’s guidance: http://www.consumer.ftc.gov/articles/0078-advance-fee-loans.

If you believe you have been a victim of an advanced fee loan scam you can file a complaint with the BBB at newyork.bbb.org or bbb.org. You may also file a complaint with the Federal Trade Commission and the New York State Attorney General’s office.