New Advanced Fee Loan Scam

CHARLESTON — Attorney General Patrick Morrisey warned West Virginia consumers about a loan scam going on in the Mountain State in which a company offers to provide a loan to a customer, but demands an upfront processing payment using a prepaid debit card.

In the scam, consumers are contacted over the phone or via email and asked if they are interested in applying for loan. Interested consumers are then directed to a fake website. After consumers apply for a loan, the company asks for an advance payment in order to proceed with the loan process. However, once the company receives the advance payment, consumers say they do not hear back from the company about the loan.

“Unfortunately, scammers are doing everything they can to look like a legitimate business only to steal consumers’ money,” Attorney General Morrisey said. “Although there are many places to get a loan, our Office encourages consumers to do their research and even call our Office if they have any questions about the legitimacy of a lending business.”

In one situation, a couple from Virginia paid $1,000 using a prepaid debit card as an “advance fee” for a loan. The business told the consumers they would receive information about their loan after the advance fee was received. The couple said that didn't happen. Instead, they said the business halted all conversations with them once the upfront fees were paid. The couple then drove to the Charleston address listed on the website to meet with the lender but discovered the address actually belonged to a different, unrelated business.

“Our Office receives complaints regularly about a multitude of scams. Many consumers are looking to get a deal on a loan due to personal credit issues, economic difficulties, or a variety of other factors,” Morrisey said. “We work diligently to ensure that consumers are not scammed by schemes that look legitimate on the surface, but are not.”

Morrisey said consumers should be wary any time a loan provider or company demands an upfront payment for service, especially using money order, prepaid debit card or cash-only. He also urged consumers to do their homework on any company with whom they plan to do business.

“If an offer seems too good to be true, it probably is,” Morrisey said.

If you feel you have been a victim of this scam, or any other loan scam please report it to our Office. Consumers are urged to call our Consumer Protection Division at 800-368-8808 or file a complaint online at www.wvago.gov.


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