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Consumer Alert:


Consumer Alert: Beware of Advance Fee Loan Scams



Consumer Alert: Beware of Advance Fee Loan Scams

~Chapter 687, Florida Statutes, prohibits loan brokers from assessing or collecting an advance fee from a borrower ~
TALLAHASSEE, Fla. (July 23, 2012) – The Florida Office of Financial Regulation (OFR) urges all consumers to be wary of Advance Fee Loan Scams. By doing your homework first, you can arm yourself with knowledge that can protect you from becoming a victim of a scam. 

The OFR has seen a steady flow of the number of complaints from consumers that have paid advance fees for the promise of a loan, but never receive the loan and cannot get their money back. In these scams, the consumer is often told the loan is “guaranteed” or “no credit check” is required but the loan broker requires a fee up front, just for the promise to secure the loan. Many of the companies operating this scam do business over the internet or telephone. In some cases the companies may appear to have legitimate storefronts listed as their physical address, but the actual location is vacant or non-existent.
Sometimes the name of the company may be very similar to the name of a legitimate company. 

The OFR offers the following tips to help protect consumers against advance fee loan scams:
• Be wary of companies requesting fees upfront. Any upfront fee the loan broker wants to collect before approving the loan is a big red flag.
• Determine if the company is the lender or a loan broker.  Section 687.141, Florida Statutes, prohibits a loan broker from assessing or collecting an advance fee from a borrower to provide services as a loan broker.
• Verify the company is licensed. Verify the license of the company or individual you plan to do business with beforehand. Most lenders are required to be licensed before conducting business.
• Get the agreement in writing. Getting everything in writing helps ensure any fees will be clearly presented and described.
• Beware of unsolicited offers. Just because you have received something in the mail or been contacted by telephone does not mean that the company or individual is legitimate.
• Loan approval is not guaranteed. Legitimate companies cannot guarantee that you will qualify and be approved for a loan.

Advance Fee Loan Scams can also involve commercial lending. While most commercial lending does not require a license to do business, companies can protect themselves from becoming a victim of an advance fee loan scam. Asking the broker or lender to provide references, getting the agreement in writing, and questioning upfront fees will help reduce your risk of becoming a victim.
If you have been victimized by an advance fee loan scam, or if you suspect questionable practices, file a complaint online with the OFR or call (850) Its-Your Money (850-487-9687).
For more information, contact the OFR Press Office:
Amy Alexander 
(850) 410-9789
Katie Norris
(850) 410-9826