Ohioans Warned to Watch for Advance Fee Loan Scams

The Ohio Department of Commerce warns Ohioans to be on guard against companies that offer loans that require advance fees.  These “companies”, which typically solicit customers on their websites, may appear to have a business address in Ohio, which often is fictitious.

“If a loan company demands money before you receive a loan, don’t even think about it,” said David Goodman, Director of the Ohio Department of Commerce.  “Never send money with the promise that you will obtain a loan.  If you do, you’ll lose your money and there will be no loan.”

These companies operate under a variety of names that are frequently changing.  Their websites may push consumers to call a toll-free number.  Often it traces back to Canada.

In a typical advance fee loan scam, financial information is solicited from the caller.  Before the loan can be processed, they say, the consumer needs to make a down payment or purchase special mortgage insurance.  The consumer is then instructed to send money out-of-state or to Canada to cover those costs.

Director Goodman offers the following tips to Ohioans:

• Always check to see if the financial service is licensed by the Division of Financial Institutions. (Go to www.com.ohio.gov/fiin/elicense.aspx to learn if it is licensed or call the Consumer Affairs Hotline at 1-866-278-0003.)
• Never provide personal or financial information to a company that is not properly licensed.
• Never send money in advance of receiving a loan (other than for an appraisal report or possibly a credit report.)

If Ohioans suspect unlicensed activity, they should report it to the department’s Consumer Affairs Hotline at webdfi-cf@com.state.oh.us  or by calling 1-866-278-0003.