Saint Paul, Minnesota – August 25, 2009 – As the U.S. economy slowly gets back on track, the Better Business Bureau is warning consumers and businesses to be wary of companies offering easy loans at favorable rates and asking for payments in advance to secure those loans. These loan offers are not legitimate and are targeted at customers and companies who are struggling with debt and poor credit, often making bad situations worse.
Advance Fee loan offers have been around for a long time and seem to surge when money and credit are tight. Offers of this nature are usually found online, in the classified sections of newspapers and magazines, or else potential victims are contacted directly via phone or email. Often with very little or no background check at all, customers are told they qualify for loans. After filling out all necessary paperwork, they are then asked to pay an upfront fee of anywhere from $300 to $3,000. The fee is either paid by wire transfer, often to locations in Canada, or debited directly out of the consumer’s checking account. It is the experience of the Better Business Bureau that customers who pay these upfront fees never receive their loans. Generally, once the requested fees are paid the companies making the offers cease contact or change their phone number.
The BBB of Minnesota and North Dakota has received complaints from customers against Brimley Financial Group, claiming to be operating out of Minneapolis. The company has promised customers loans ranging from $5,000 to $10,000, asking for upfront fees of anywhere from $800 to $2,500. Customers report they wired the money as the company requested – to an address in Canada -- and then never received their loans. In some cases, the company promised to provide refunds and failed to do so.
To protect yourself and your business, the BBB advises the following:
• If you’re asked to pay a fee upfront or wire funds to receive your loan, the offer is not legitimate. According to the Federal Trade Commission, it’s illegal for companies doing business by phone in the U.S. to promise you a loan and ask you to pay for it before they deliver. Requiring advance fees for loans is also illegal in Canada
• Be sure to check the company’s reliability report with the Better Business Bureau at www.bbb.org
• Beware of lenders not interested in your credit history and/or advertisements that downplay bad credit.
• Remember, the Internet is full of bogus offers. If it sounds too good to be true, it probably is!