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Educational Consumer Tips


Author: Better Business Bureau

Beware of advertisements for "advance fee" or "guaranteed" consumer and small business loans. They are against the law. These businesses ask you to pay a fee ranging anywhere from $30 to several hundred dollars before you receive a loan. According to the FTC's Telemarketing Sales Rule, if someone guarantees or suggests that they can get or arrange for a loan for you, they cannot ask you to pay for their service until you get the loan or credit. Keep the following points in mind before you respond to ads promising easy credit or loans: * Legitimate lenders never "guarantee" or say that you are likely to get a loan or credit card BEFORE you apply, especially if you have bad credit, no credit, or have filed bankruptcy. * If you are applying for a real estate loan, it is accepted and common practice to be asked to pay for a credit report or appraisal. However, legitimate lenders will never ask you to pay for processing your application. * Never give your credit card account number, bank account information, or Social Security number over the telephone unless you are familiar with the company and know why the information is necessary. * If you do not have the offer confirmed in writing, and you are asked to pay, hang up. In some cases, advance fee loan companies simply pocket your money and disappear. If you have been a victim of such a scam, contact your local Better Business Bureau to report the company.