Consumer Finance Scams

By Susan Grant

Posted by Mike Hughes

The Scope of the Problem
Consumers who face financial troubles, such as heavy debt, poor credit, or the need for substantial help for educational or personal finances, usually can least absorb the economic injury caused by fraud. Fraud promoters know that these consumers are willing to pay small amounts of money to process loans, arrange financing, or help locate sources of credit that promise to cure their financial woes. Recent FTC law enforcement efforts demonstrate that fraud promoters who promise financial services or assistance for a several-hundred-dollar fee generally do not deliver. Instead, they take millions of dollars from consumers without providing any services at all.

Advance-Fee Loan Scams
Consumers often respond to ads in the classified section of newspapers or magazines that promise loans or credit cards regardless of an applicant's financial situation or credit history. A fraudulent telemarketer typically tells them that they must pay a fee in advance --ranging from $25 to several hundred dollars--for the loan or the credit card...

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