Advance Fee LoansThe Advance Fee Loan scam involves consumers receiving a phone call or email, or they respond to an advertisement for a pre-approved loan or credit card. The product is targeted at people with poor credit history, and claims are made that no matter what the credit history, the consumer can receive a loan or credit card. When the consumer enquires, they are told that yes, they can have the credit, all they have to do is pay an advance fee or security to obtain the credit.
Often, the consumer will receive no loan or credit card for the money they have paid. The company may tell the consumer they were unsuccessful, or the company will simply disappear. This may be contrary to guarantees that they would receive credit.Prevention:Never respond to companies that guarantee credit before an application. Legitimate credit lenders will never guarantee credit to a consumer before they apply, especially if they are dealing with consumers with bad credit history.
If you are asked to pay for processing fees, or an amount as security for a
credit card or loan, don't. Some lenders may ask you to pay for a credit report
or appraisal, but they will never ask you to pay processing fees before the
credit is approved.
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