Don't Let Lure of "Easy Guaranteed" Loan Ruin Your Holiday and New Year - December 12th, 2001

Arlington, Va., USA and Ottawa, Ontario, CANADA, December 12, 2001 - The BBB system issued an international alert today to warn consumers throughout North America not to succumb to the lure of the "easy loan" from questionable brokers.

Calls to Better Business Bureaus have surged in recent weeks as U.S. residents report having applied for loans from so-called loan "brokers" based in Canada, mainly the Toronto area. These types of sales pitches typically accelerate during uncertain economic times or periods of high unemployment.

"Advance fee loan scam artists who peddle easy-to-obtain money will spoil your holiday season, from a financial as well as an emotional standpoint. They steal more than your money - they steal your hopes and dreams. And, most recently, they have also begun to purloin private financial information that may later be used to perpetrate identity fraud and other crimes," warned the president and CEO of the Canadian Council of Better Business Bureaus.

Complainants to the Better Business Bureau state that they responded to enticing newspaper and web site advertisements promising easy credit and easy loans. After calling a toll free number, the victims heard a friendly voice that requested personal information, promised to send an application form, "confirmed" the loan approval, and then requested a fee for insurance purposes. In each instance, the victim provided considerable personal and financial information (bank account number, credit card number and/or social security number) and a fee of between $500 and $3,000.

The Canadian Council has identified 50 companies based in the Toronto, Ontario area alone that are offering these loans. A list of companies is provided on the Canadian Council website (ccbbb.ca/advance.html), along with a map identifying the location of US victims.

"This fee can very seldom be recovered, resulting in further financial hardship for the victim. Consumers who succumb to these fraudulent advertisements dig themselves further into debt, and may pass along enough personal information to haunt their credit records into the New Year and beyond," said Ken Hunter, president and CEO of the U.S.-based Council of Better Business Bureaus.

On one recent day (Friday, December 7th, 2001), the Canadian Council office received calls from victims reporting losses totaling $10,000. In the first hour the office is open, calls came in from victims in Killen, Alabama (reported a $2,000 loss) and Detroit, Michigan ($650). Calls were also received from Houston, Texas and Baltimore, Maryland from individuals who had not yet sent the $994 and $650 fees requested, but had already provided personal information.

Consistently, the victims express regret that they did not call the Better Business Bureau first before sending the advance fee money. None of the victims had received the loan as promised.

Consumers who are in need of extra cash this holiday season or at any time, are advised to carefully investigate all offers of easy credit or easy loans with the Better Business Bureau.

As a rule, 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 receive any loan paperwork. According to the Telemarketing Sales Rule, if someone guarantees or suggests that there is a strong chance they can get or arrange a loan or other form of credit for you, it's against the law to ask you to pay - or accept payment - for their service until you get your loan or credit. 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, be aware that is a common ploy to avoid law enforcement detection. Refuse to do business with the broker until you have his or her physical address or location and can check 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 lender. Then contact the Better Business Bureau in that city to request information on the lender. A directory of BBBs is available on the BBB web site (www.bbb.org) by clicking on the "Locate a BBB" button.

Alert: Canadian-Based Loan Scams Are Blanketing The U.S. - November 8th, 2000

The Canadian Council of Better Business Bureaus (CCBBB) reports that advance fee loan scams, originating in Canada, are once again being marketed to U.S. citizens. The CCBBB 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 the president of the CCBBB. The Canadian Council is the umbrella organization for the 14 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 lender. 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 on the U.S. web site www.bbb.org, or the Canadian website ccbbb.ca." 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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