BBB Serving Western Virginia is warning consumers nationwide about Loan Express Incorporated, an Advance Fee Loan Company that purports to be located in Vinton, VA. BBB began receiving inquiries about this company on November 27, 2012. The company is not located at the 1211 Hardy Road address listed on their ‘loan agreement’ form and their website. The company's website was created on November 8, 2012 and appears to be hosted overseas.
Consumers state that after applying for a loan online, they are contacted via email by Loan Express, Incorporated guaranteeing them a $10,000 personal loan. In order to obtain the loan, consumers must pay collateral of three months payments, usually in the excess of $700.00.
After wiring the money and not receiving the promised funds, one consumer stated, “I called and asked what had happened and she said my account had a red flag on it and said I would have to purchase the insurance to insure my loan would be covered in case I default.” “I went to Western union to transfer the $645.00 to cover insurance premium on 11/27/12. Called Kathy Stevens, Accounts Receivable to give her the wire transfer number and she said she put a rush on my account and I would receive the funds in my account in 3-6 hours or first thing in morning 11/28/12”. The funds were never deposited into the consumers account.
Most people learn about the bogus loan offer from ads in local publications and online through websites and classified sites. These websites promise easy loans, credit cards and other financing offers – regardless of credit history. Often, an advance-fee loan scam website will be created and taken down within a couple weeks only to be replaced by another operating under a different name and fake business address.
The websites look professional and sometimes require the victim to fill out loan application forms that request such information as the victim’s bank account and Social Security numbers. Eventually victims are told they are approved for the loan and just need to pay an advance fee – sometimes as much as thousands of dollars – via money order or wire transfer to pay for insurance, the first two month’s payments or to be used as collateral. Those who pay never get the promised loan and are sometimes tricked into giving the scammers even more money.
The BBB recommends that consumers shopping for a loan look for the following red flags of an advance-fee loan scam:
Red Flags: Be wary of:
• Guaranteed approval. It's a warning sign if the company promises loan approval before the borrower applies.
• Pressure to act immediately. Advance fee loan schemers will try to get consumers to send money or give out personal information (bank account information, credit card and Social Security numbers) before providing any paperwork.
• Hidden fees. Be suspicious if the lender understates loan costs or won't provide a written summary of all fees associated with the loan.
• Evasive tactics. Be wary if a company refuses to provide location information. If they hesitate to reveal their physical location, it is usually a ploy to avoid law enforcement detection.
• Internet lenders. When applying for loans online, the consumer may have to fill out a detailed application; providing bank account information and other personal details. If the lender does not abide by strict privacy policies or fails to secure their website, identity theft risks abound. Additionally, some internet lenders may attempt to bypass state usury, licensing and consumer protection laws by residing in states with lax regulations or outside the U.S.
• The lender is not registered in your state to do business. Check with the state’s financial or banking regulators.
• The lender asks you to wire money or send a money order before you can receive the loan. You might be asked to wire money to another country. Consider this a giant red flag.
The BBB recommends the following tips when shopping for a loan:
• Don't buy into bogus loan promises. If a loan offer is made and you must pay to get access to the funds, it is a scam. It is illegal for telemarketing loan providers to offer a loan and require an upfront payment before it is issued.
• Never wire money or send money orders to obtain a loan. Legitimate lenders won't pressure you to wire funds. Never send funds to a third party.
• Be wary of loan approval or financing guarantees. Be suspicious of any lender that pre-approves loans or financing without checking your credit status or contacting references—especially if you have bad credit or no credit record.
• Don't pay for a referral. Beware of referral service companies that promise to connect you with "guaranteed" lenders, creditors or loan officers for an upfront fee. Instead, contact potential lenders or financial institutions directly to discuss options.
• Avoid copy-cats. Be on the lookout for forged paperwork and websites; scammers often mimic legitimate organizations or use well-known or common business names.
• Question their "connections." Many of the schemers using telemarketing to promote loans have no connection to established financial institutions. Ask which lenders the "loan broker" deals with, and ask for the lender's physical address. Contact purported partner companies to confirm affiliations.
• Research the business. Take time to examine the company and collect information on the opportunity. Refuse to do business until you have their physical address or location and can research them online. Get free BBB Reliability Reports on lenders and other businesses at www.bbb.org
• Review qualifications. Lenders and loan brokers should be registered in all states where they do business. To verify, call your state’s regulatory and licensing offices.
• Collect paperwork upfront. Before applying for loans or credit, expect a written contract or agreement. Make sure all verbal guarantees, details, fees, terms and timelines are enclosed. Under the Truth in Lending Act http://www.fdic.gov/regulations/laws/rules/6500-200.html , all loan costs should be clearly and prominently disclosed in writing.
• Apply with caution. Before giving out your credit card, bank account or Social Security number, find out why the information is necessary. Verify the company's credibility before applying or giving out any personal details.
• Don't make loan payments to an individual. Payments should only be issued to a legitimate lender or authorized borrowing institution.
• Look at other financing options. Consider an advance on pay from your employer, or a small loan from a family member, friend, credit union or other lender.
• Ask for a deferment. Ask creditors for more time to pay bills. Find out what charges apply: Will there be a late charge, additional finance charge or higher interest rate?
• Get debt assistance. If facing financial troubles, contact a local consumer credit counseling service for help. Many non-profits charge small fees or no costs. Try using BBB's free online program Managing Credit – Made Simpler, http://www.bbb.org/credit-management/.
If you’ve become a victim of an advance-fee loan scam, report the scam with the following agencies. Advance-fee loan scheme victims can file complaints with:
1. Federal Trade Commission at www.ftc.gov or 877-382-4357.
2. Internet Crime Complaint Center if the scheme occurred online or by e-mail, http://www.ic3.gov/complaint/default.aspx.
3. Virginia Attorney General’s Office, www.oag.state.va.us/Consumer%20Protection/index.html or 800-552-9963.
4. Better Business Bureau at www.bbb.org or 540-342-3455; 800-533-5501 for western Virginia residents.
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 email
Additional Tips, Articles and Resources:
FTC: Money Matters – Advance Fee Loans: www.ftc.gov/bcp/edu/microsites/moneymatters/dealing-with-advance-fee-loans.shtml
FTC: Advance-Fee Loan Scams: ‘Easy’ Cash Offers Teach Hard Lessons, http://www.ftc.gov/bcp/edu/pubs/consumer/telemarketing/tel16.shtm
BBB advises consumers to avoid any advanced fee loan companies, and to thoroughly investigate any loan company prior to signing an agreement or giving financial information to them.
If you need more information, contact the BBB at (540) 342-3455 or (800) 533-5501. You can also visit www.bbb.org.
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