How To Spot "Up Front Fee" Loan Scams
Save money, time, and headaches with these
tips to spot loan scams:
Any loan offer that requires an advance fee in order to achieve financing, should be carefully analyzed. Most typically prey on the weakest members of society. These dishonest companies usually guarantee unsecured personal or business loans to individuals that are not able to achieve approval for a loan via conventional lending institutions (banks, credit unions, etc.) or go after those with minimal financial knowledge. Equipped with a very aggressive but smooth pitch and an absolute lack of ethics, these scam artists typically swindle amounts that vary from a few hundred dollars to several thousand from unwary applicants. Making the matter even worse, these con-artists usually obtain enough personal info from their victims opening them up to identity theft. The advice below will help you avoid these despicable loan scams:
Signs of a loan scam:
1- Be aware of unsolicited emails, phone calls and/or letters offering you an immediate 100% guaranteed loan approval, there is no such thing. There's simply folks in the US that simply can not get funded regardless of what they do within 90 days.
During our years of doing business online, 99.99% of the time we have heard of these scammers that contact consumers by phone as having heavy, foreign accents. They often will misrepresent a legitimate company, even using the legitimate company's address in their sales pitch or even worse, utilizing the legitimate company's phone number as the display number on the caller ID when contacting unknowing consumers.
A1 Loans USA & A1 Financial USA know exactly what is possible and what isn't. If you are ever approached with a loan offer
like this, call us before doing anything. We will tell you whether it's real or not. There are a few legitimate programs out there, like A1's Contract Funding (click here to read about it).
2- Requirements for advance sending of money to cover the costs of the application, loan insurance, or the first month's premium should be an instant red-flag of a loan scam.
3- Once these thieves have hooked you with you making an advance payment for your loan, they will often ask for even more money up-front indicating that the original quoted required advancement was incorrect, deficient upon a second examination of your credit, or that there is a second company involved that is also requiring advance fees in order to finalize your loan request.
4- Any sort of request for wiring of money via Western Union or a Moneygram to a non-US country lie Nigeria, India, Canada, England, etc. is 100% a scam...never send money overseas for a U.S. loan....It's NEVER real.
How Do Advance Fee Loan Scammers Locate Potential
It is never a good idea to submit many (more than 3) online applications for loans. Whomever is selling data to these scammers are likely seeing your information every time you apply.
After you apply several times on different websites, they contact you because they know that since you applied all over, their scam can not be traced back to whomever is selling your data.
In general, be alert of unsolicited offers by phone, mail and/or email that guarantee loan approval. You should never disclose any personal information including but not limited to bank account info or your Social Security Number to anyone unless you are 100% certain that the company is legitimate and you have filed the application.
It is also very common for consumers to come across a classified ad or a website commonly placed on very reputable distribution channels, offering loans for people with bad credit and no credit. Some scammers will even use the logos of reputable lenders in their ads but insert their own contact info, tricking consumers into thinking that they are contacting legitimate lenders.
How Do Loan Scams Work?
There are several different variations of this type of advance fee loan scam. However, the fundamental steps are all the same. First, the applicant is guaranteed that they have been approved for an unsecured personal loan, typically for a very large amount. Authentic looking loan documents with all sorts fancy logos and embossed stamps will be sent to these consumers assuring them that the financier is a legitimate company. Below is an acceptance letter example we received from one of our visitors.
I would like to apologize for the holdup in getting you your loan agreement documents. We have been having technical issues with our system. As per our phone conversation, you will find a copy of the loan commitment attached, reflecting the loan that we have been able to approve for you.
Please go over the forms, sign and fax back all four pages. Please do not forget to include your banking information
so that we can directly deposit your funds into your account.
In addition, please do not forget to fax your driver's license as proof of identification. Please feel free to contact me at any time with questions. Thank you for your business! We look forward to getting you the financing that you need!"
The above letter may appear to be professional, coming from a legitimate company, even using a legitimate company's name, address and phone number in their solicitation, but is merely a form letter, copied many times and used over and over, intended to create a comfort zone for the consumer and eliminate any fears that they may be partaking in a scam.
After you fax the required documents, the next step of the scam is that you will be told that you need to make a deposit as a down payment for your loan because of your problematic credit rating. The deposit will be used as an insurance premium, or processing fee and will range from a few hundred dollars to several thousand. This deposit is usually required to be sent via Western Union or a Moneygram.
It is also common for the advance fee loan scammers to ask for an additional deposit after you send the first one because your poor credit rating requires an even larger deposit than initially quoted. Another angle of the scam is that they will contact the consumer posing as a different lender, indicating that the first lender has backed out, and that they will need an additional advanced fee in order to process the loan.
Typically, once the consumer comes to their senses and realizes that they have been victimized and that no funds are coming, the scammers have disappeared. The provided phone numbers are either disconnected or go straight to an answering machine. The operation likely also already relocated to a new location and are on the way to finding their next group of victims.
Go with a trusted funding source -- only one A1 Financial USA recommends-- through applying on this website. We never require a fee for applying. 99.9% of our funding programs will never require an upfront fee, because we perfectly and legitimately fund businesses, and have for 34 years, now. We celebrated our 34th anniversary Jan 11, 2024. If your funding request is so unusual or "above normal expectancies" that it requires a video taken, or specialized Accountant document work, we will advise you upfront, in detail, and provide a contract guaranteeing the funding, with refund terms if unsuccessful in 90 days....never a quick phone demand like scammers do.
Use A1's FREE "Scam-Buster" Service:
At A1, our sole purpose and pledge is to advise you on the best funding for you, or else best course of action to point you towards the best funding for you, and your business, period.
On this pledge you have my solemn word as A1's CEO...
So I've set up a loan scam buster hotline, if you ever receive
a loan offer you don't agree with, with upfront fee or not,
simply call us for our immediate evaluation. We've had clients in
the past call with a fraudulent loan offer, with advance fee
required, that we actually funded with better terms, and with
no fee at all!...(909)-930-9159 is the number to call.
Leave a message if our AI A1 Robot Alicia picks up, we'll call you right back momentarily.
A1 Financial CEO