Canadian-Based Loan Scams Are Blanketing The U.S.
MI (SafetyAlerts) - The Canadian
Council of Better Business Bureaus (CCBBB) has reported that advance fee loan scams,
originating in Canada, are once again being marketed to U.S. citizens. The CCBBB stated it
is receiving more than 20 calls each week from upset citizens throughout the United States
who have sent checks and money orders to Canada for loans between $5,000 and $25,000.
"Unfortunately, no loan money
has or will be received by these people. These individuals not only lose the advance fee
they submit (which can total several thousand dollars), but they are also being conned
into providing considerable personal information on the promise that they will receive a
loan," said Bob Whitelaw, president of the CCBBB. The Canadian Council is the
umbrella organization for the 15 BBBs located throughout Canada. The CCBBB estimates that
$25 billion is leaving the real business economy and going into the scam economy.
"We're working with the BBBs in
the U.S. to alert consumers and businesses not to fall victim to these enticing
advertisements," Whitelaw said. Calls to the BBB indicate that those victimized have
responded to advertisements in local newspapers or on the Internet offering financial
help. When the consumer contacts the toll-free number, they are asked to provide personal
information, such as Social Security Number, driver's license number, bank account number,
employee number and pay stubs, on the promise that they will receive a loan.
Once the personal information is
submitted, the consumer receives a call that he or she has been approved for a loan
amount, usually in the range of $5,000 to $25,000. However, before the money can be
deposited, the consumer is told to send a certified check or money order (for several
hundred to several thousand dollars) to an address in Ontario or another Canadian
province. Those consumers that have sent checks have not received the promised loan money.
"Attempts by the Better Business
Bureau and Canadian law enforcement and government agencies to contact the companies in
question usually prove unsuccessful. It's very seldom that the company can be located to
get the loan fee returned to the consumer," Whitelaw said. "Ontario Government
staff of the Ministry of Consumer and Commercial Relations are aware of the companies and
are seeking to close the operations. Unfortunately these fraudulent operations move
quickly and reopen with new names." The BBB advises consumers or business owners
seeking credit to thoroughly investigate advertised offers from unfamiliar loan brokers,
particularly those originating out-of-state or out-of-country.
"You need to ask yourself, why
is this company, which I have never heard of, and which doesn't know me, willing to give
me a loan?" said Ken Hunter, president of the U.S.-based Council of Better Business
Bureaus. BBB experience indicates that the following are signs of advance fee loan fraud:
Pressure to act immediately.
Advance fee loan schemers will try to get you to send money or give out personal
information (credit card numbers, bank account numbers, social security numbers) before
you get any paperwork. Insist on receiving the necessary paperwork before deciding whether
to apply for credit.
Will not provide location
information. If the loan broker hesitates to tell you their physical location, beware that
is a common ploy to avoid law enforcement detection. Refuse to do business with the broker
until you have their physical address or location and can check them out with the BBB.
Questionable connections to
established financial institutions. Many of these schemes are merely telephone sales
operations, so no connection will exist to an established financial institution. Ask which
lenders the "loan broker" deals with, and ask for the physical address of the
Then contact the Better Business
Bureau in that city to request information on the lender.
"Finally, don't accept the loan broker's claim that he or she is 'approved' by the
BBB," Hunter added. "BBBs do not endorse, recommend or approve companies. Ask
what BBB the business claims to be affiliated with, and then contact that particular BBB
for a report. A list of BBBs in the U.S. and Canada is available at BBB's web site
www.bbb.org." Individuals or business owners that suspect they may have already been
swindled are urged to file a complaint with the BBB. "Take the time to
complain," said Whitelaw. "That way you help warn others not to fall victim, and
you assist in getting these fraudulent cross-border operations shut down."
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