Avoiding Loan Scams
The Federal Bureau of Investigations (FBI) has been publishing reports revealing a rise of mortgage and loan frauds for several years now. Fraud is so common nowadays that the Federal Trade Commission (FTC) is continuously updating the list of scams, online scams or phone scams.
The FTC also published a full report about advance-fee loan scams, which is another popular model to rip off people. Scammers will often impersonate legitimate lenders - beware!
Advance-fee loan scams
Advance-fee loan scams are promoted on the Internet, but also through newspapers and magazines, as well as by direct mail, phone calls, radio and infomercials on cable TV.
The Federal Trade Commission recommends a simple formula to detect and avoid this scam: if you are asked to pay up-front fees in order to apply for a loan, then it is most likely a fraud. Legitimate offers do not require such advance payment. Furthermore, never wire someone money via Moneygram or Western Union for an online purchase or for a loan.
There are many, many terrifying stories of people wiring $500 to $3,000 in order to obtain a loan. The phony lender will tell the consumer that their loan has been “approved” but that they must put 10% down before they can get their loan. After they wire the money, the loan never comes.
Stories like this usually end up among the thousands of complaints that the Federal Trade Commission, the National Association of Attorneys General, the Federal Bureau of Investigations, and the Better Business Bureau receive every year.
Consumer alerts are aimed to create awareness among the general public because they are hurting real estate professionals, lending institutions, and ripping off thousands of victims nationwide.
For more information, visit directlendingsolutions.com
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