Scam Warning: Beware Of New Loan Scheme

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TOPEKA, Kan. (WIBW) -- Scammers claiming to be from South Dakota are ripping off victims on an "advance fee loan" scheme.

The Better Business Bureau is warning consumers of a scam where phony lenders are making false promises to borrowers in exchange for upfront fees.

In each instance, the victims are "approved for a loan" after applying online and are required to send a fee in order to secure the loan.

None of the victims actually received their loan once the fees were paid.

The fake company told it's victims it was operating out various locations in South Dakota.

The BBB says to beware of anyone who asks you to pay in advance for a loan, which is illegal and a sure sign of a scam.

Here is a partial list of resources on how to avoid being the victim of a scam.

  • Be very suspicious of advance fee loan calls. Even if the loans are real, interest rates can be extremely high or the business can be an outright scam. Always do business with local companies with brick and mortar locations when possible.

  • Don’t let the promise of extra cash or lower monthly payments get in the way of your good judgment about whether the cost you will pay for the loan is really worth it. (Know how much the loan will cost you at the date of pay off.)

  • Be extremely cautious when giving out any personal information online such as Social Security and bank account numbers. Be alert for websites that force you to give that information before even telling you whether you qualify for a loan.

  • Never wire money. Scammers pressure people to wire money through commercial money transfer companies or to load money on Green Dot cards because wiring money or giving out the number on the card is the same as sending cash. When the money’s gone, there’s very little chance of recovery. Con artists recommend these services so they can get their hands on your money before you realize you’ve been cheated.

  • Always check with BBB at before doing business with any firm.
  • Posted by Greg Palmer