Beware Online Loan Scammers

— -- Dear ABC News Fixer: I tried for a loan online and was stupid enough to send more than $3,000.

They said it was for various things like processing fees, or because I had bad credit, or for insurance on the loan.

They keep giving me the runaround. This all started back in March and we are still trying to recover from it.

- Wendolyn M., Kilgore, Texas

Got a consumer problem? The ABC News Fixer may be able to help. Click here to submit your problem online. Letters are edited for length and clarity.

Dear Wendolyn: Unfortunately – as you now know -- this wasn’t a loan at all. This was a scam, plain and simple. And it’s one of the worst tricks there is – preying upon people who already are in financial trouble to steal their last penny. It’s despicable.

You told the ABC News Fixer that you want to get to the word out to others so they don’t fall for it, too: “I’d hate for someone else to go through this,” you told us.

Here’s how the scam went down:

First, the “loan company” piggybacked off the name of an actual payday loan company that issues short-term loans. (For the record, The Fixer is no fan of payday loans, as some carry interest rates of 300 percent or more. But that’s another story.)

The people who scammed you were not part of any actual loan company.

From the beginning, there were red flags all around.

You were promised a $15,000 loan. But first, the scammers had requests for you – to send money for fees, for insurance, for a deposit to prove you were a good risk -- all sorts of little payments that over the months totaled more than $3,000. All the while they dangled the loan, which you needed to help pay off some debts.

And of course, no loan money ever came.

This set-up is called an “advance-fee loan scam” and unfortunately, these cons are not new. They can be quite sophisticated, with realistic-looking loan applications and even fake loan officers who deal with you over the phone.

You told us you filed complaints with the FBI, Federal Trade Commission and local law enforcement, which was smart to get it on the record. Such cons are difficult to bust, however, with many being run from overseas using “spoofed” phone numbers that appear to be here in the United States.

We’re so sorry you got scammed, and we hope karma will get the people who did this to you.

For everyone else out there, here are the red flags of an advance-fee loan scam:

- The supposed lender doesn’t seem to care about your credit history.

- The lender guarantees you’ll get a loan, no matter what.

- The lender claims that you’ve been approved for a loan, but then starts demanding fees upfront for vague reasons like “insurance,” “processing” or “paperwork.”

The Federal Trade Commission says a demand for any upfront fee is a clue to walk away. A legitimate lender will charge a fee – but they will take the fee from the amount you borrow and not ask you to put up money before you receive your loan.

Poor credit takes a long time to rebuild, but it can be done. If you’re in trouble with paying bills, try contacting your creditors to ask for a more realistic payment plan. Nonprofit credit counseling services may also be able to help.

- The ABC News Fixer

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