Bogus advance fee loan company uses online classifieds to target victims

Better Business Bureau is warning consumers about a loan scheme targeting residents across Canada.

  • Jul. 26, 2012 2:00 p.m.

Better Business Bureau (BBB) is warning consumers about a loan scheme targeting residents across Canada through online classified ads promising personal and business loans up to $100,000.

“In a market where credit is tightening, consumers will look to these unregistered loan companies who are only interested in collecting fees,” says Danielle Primrose, president and CEO of Better Business Bureau of Mainland British Columbia. “Offers that practically guarantee loan approval are usually too good to be true.”

Global Financial Services purports to be at 600-666 Burrard St. in Vancouver, but there is no licenced or incorporated company at that address. Consumers who found the Global Financial Services ad on the online classified, (and other Canadian city sites) believed that they found a local company offering loans.

The company conducts most of its business through e-mail, including sending its contract for an advance fee loan. A consumer reported paying an advance fee of $216 to “cover transfer, insurance and underwriter’s fee” to Global Financial Services. The company provided a loan agreement, which offered to lend $10,600 to the consumer. The consumer was instructed to send the fee through wire transfer services. The wire transfer record shows that the money may have been transferred to a Montreal, Que. address. The consumer did not receive the loan.

The Better Business Bureau offers the following points to consider before responding to ads promising guaranteed loans:

• Stay away from advance fee loan companies. It is illegal for a company to charge a fee in advance to obtain a loan, even if that fee is disguised as the first or last month’s payment, security, or insurance. Victims of advance fee loan schemes who have sent money to process a loan have not received the loan as promised. Although legitimate lenders may charge a fee, the fee is deducted from the loan amount. You should never have to pay a fee in order to obtain or apply for financing.

• Be cautious about online loan offers. Bogus loan brokers are out there posing as legitimate ones and using online classifieds because these scammers can post anonymously. Legitimate loan brokers would not guarantee any qualification for a loan before reviewing your financial history.

• Do your homework. Protect yourself by doing your research and taking precaution with whom and how you give your personal and financial information. Check with the Better Business Bureau first at by looking up the company’s business review, or call and ask to look into the company.

• Don’t be pressured to act immediately. Loan scams will always use terms like this offer for a limited time only or the phone calls will have high pressure tactics. Don’t allow yourself to be bullied into providing your information or payment.

• Avoid giving out personal information. Advance fee loans not only aim to profit from financially vulnerable consumers, these schemes often ask for sensitive personal information like Social Insurance Numbers, driver’s licence numbers, and possibly banking account information. Do not provide this information unless you are certain you are dealing with a legitimate company.

• Report the crime. The Better Business Bureau strongly urges individuals to report any suspected fraudulent schemes to their local police or to Canadian Anti-Fraud Centre at 1-888-495-8501. Victims of bogus loan brokers are encouraged to file a complaint with the BBB. While the chance of recovering the payment fee is minimal, victims can provide information to help BBB warn consumers and assist government investigations.

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