You should never pay money to get money, Rosalind Scott, president of BBB Vancouver Island reminds residents after being contacted by a victim out $7,000.
“It was pretty significant. If you’re going online to get a loan you already have some debt,” Scott said. “The big red flag here is this $7,000 was for legal fees, administration fees, up-front costs to secure the loan, paperwork. Reputable financial lenders do not charge any of that; costs are built into the loan.”
The consumer claimed to lose nearly $7,000 to fraudsters pretending to offer online loans through a company using the name Business Fund Group. The fake loan company set up a website with an Oak Bay address. Once the fees were paid, the website disappeared and the phone was disconnected, leaving the victim in greater debt.
“This is what we are here for. If they’re not sure, check it out. We have that information and if we don’t have it we will investigate so that we do have it. We can help people not to lose $7,000,” Scott said.
“Most scammers once they’ve got success on a scam, they change information, they move, they shut it down.”
To protect yourself from fraudulent online lenders BBB suggests researching the company first. Make sure it’s a legitimate, reputable online lender.
Be aware that some companies that appear to be online lenders are actually companies acting as “lead generators” who collect personal information to sell.
The BBB suggests before applying for a loan online be sure to see if you can actually find the brick and mortar location.
Be sure to get every detail of the loan agreement in writing and read the fine print. Be suspicious if the company won’t provide a detailed copy of the loan agreement.
Never wire money. Legitimate financial lenders will never ask you to wire money to them for any reason. In fact, very few legitimate businesses will ever ask you to wire money to them.
Scam artists like to use money-wiring services because once the money has been sent it is virtually untraceable.
Use common sense. The reality is that if you are in a financially challenging situation, with significant debt and a poor credit rating, it is very unlikely that you will easily qualify for additional loans from any lender.
Legitimate, reputable financial advisors can help you come up with a long-term plan to repair your credit rating and reduce your debt, without charging you advance fees or additional fees for their services or advice.
“We see online loan scams fairly frequently. Undoubtedly there are many different scammers running this scam,” Scott said.
“They will be popping up somewhere else, they’ve clearly done this before is my guess.”
Visit bbb.org/Vancouver-island for more information or additional consumer and business tips.