Green Dot marks the spot for loan scams in Valley

The Sun-Gazette

Tulare County could be considered the poverty capital of the Golden State. So when loan scams target the Central Valley and the state’s poorest resident, they are particularly harmful.

The Better Business Bureau (BBB) serving Central California is alerting consumers of a scam that is hitting the area. So called “lenders” are making false promises to borrowers in exchange for an upfront fee. Some victims are losing $1,000.

Blair Looney, President and CEO of the BBB serving Central Californ and Inland Empire counties notes that “if a lender says you can get an easy loan, but you need to pay them some cash upfront-walk away.”

If you believe you have been a victim on advanced fee loan scam, you can file a complaint with the local BBB at or by calling 1-800-675-8118 or contact the attorneys general office at 1-800-952-5225.

Victims are commonly responding to TV, newspaper or website advertisements that “guarantee” loans to people with poor credit.


How the scam works

Consumers apply and get “approved’ for loans online. They are then asked to “secure” the loan by paying fees under the guise of a variety of names such as interest fees, collateral or insurance costs on the loan, or a lender or broker’s fee. The Fees range from $150 to $500.

Victims are instructed to transfer the cash not from their own account but from a re-loadable credit card like the Green Dot Moneypak. The lender often times revisits the same victim for more fees and eventually never issues the loan. After a time the “lender” will shut down their website and disconnect their phones.

Charging an advanced fee for a loan is illegal. Pressuring consumers to act immediately, written communications containing typos and grammatical errors, “guaranteeing” a loan even if you have bad credit or no credit, and demanding to have money wired to them before you have a loan offer in writing, are all clear indicators of a “Lender” scam.

Things to keep in mind when indicators of scam arise are:

• It is illegal or companies doing business by phone in the U.S. to promise you a loan or credit card and ask you to pay for it before they deliver.

• Lender and loan brokers are required to register in the states where they do business.

• Perpetrators give their companies names that sound like well-known or respected organizations and create websites that look professional.

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