I found this article about Serious Advance Fee Loan Scam on the American website.
http://mortgagefraud.squarespace.com/journal/2004/10/10/serious-advance-fee-loan-scam.html
Serious Advance Fee Loan Scam
Posted on Sunday, October 10, 2004 at 11:18AM by The Editor - Ian Shuter in Investigations, Advance Fee Fraud, New York | Post a Comment
Finger Lakes Times - October 10, 2004
GENEVA — An advance-fee loan fraud bilked a local woman out of $1,100 recently.
Advance-fee frauds promise victims some payout, loan or other benefit — if only they’ll send money first to cover administrative fees. The most well-known example is the infamous Nigerian e-mail, which offers a large share of a deposed or deceased leader’s fortune in exchange for laundering the money into the United States.
Amy Gay, of North Exchange Street, was not interested in a windfall. The divorced mother of a 12- and 17-year-old said she just wanted to improve her credit rating when she saw an advertisement for Paragon Financial Group Sept. 12 in the The Week Ender of Geneva. The ad offered personal, home, business and debt consolidation loans to people with “damaged” credit.
CANADIANS WITH BAD CREDIT DESPERATE FOR A LOAN
I think what we're seeing with these advance fee loan scams are people who are urgently seeking a loan, and are looking for an anonymous online lending company..
I can see why these scam loan websites would be appealing for somebody who has bad credit and is desperate to borrow money:
The borrower wants to remain anonymous because of their "shameful" situation. The borrower hopes that this anonymous lender doesn't need to report to Equifax Canada or TransUnion Canada.
While this might seem like a fast and easy way to get credit, it's not and it's going to cost you your "loan fee" deposit.
QUESTIONS TO ASK A PROSPECTIVE "LOAN BROKER"
If you've got bad credit and are tempted to use a website loan brokerage service, ask the loan representative the following question:
Which lenders do you broker for, "Royal Bank, TD Canada Trust, an insurance company, VFC Inc??"
Website loan brokers are not going to lend you the money to you themselves... ultimately the loan will come from an established, registered and regulated lender in Canada.
If this scammy website loan company says that they deal with Royal Bank, or TD Canada Trust, contact the Royal Bank's loan department and ask if they deal with the website loan company that you're talking to. If the registered lenders such as Royal Bank hasn't heard of this company and haven't dealt with them, you know that the website loan company is a scam. Red flags should go up immediately..
Reasonably speaking, if you've got bad credit, a creditor is taking a big risk lending to you. To compensate for the high amount of risk that they're underwriting, they'll want to charge 30%+ interest rates, fees, and what ever else they can get from you.. They'll also take security to back the loans.
The highest risk lenders in Canada are the payday loans companies such as moneymart.ca. Money mart charges very high interest rates and all sorts of fees, because they're usually dealing with clients who have bad or no credit.
If you suspect a site in Canada which is doing the illegal Advance Fee Loan Scam let us know immediately. We can do some preliminary research on the suspected site and report back to our readers.
Phonebusters.ca, Consumer Protection need to know that these sites are working illegally and are just set up to steal people's money.
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