When money's tight, many people look for a loan. But with banks saying no to more and more applicants these days.... more and more of us are looking for other lenders.
And unfortunately, that's where you can get into big trouble.
One Woman Loses More than $1,000Denise Thomas, like so many families these days, is strapped for cash. She tells me "I wanted to consolidate my bills."
So when she saw an ad for "Invesco Lending" --supposedly on 3rd Avenue in New York City -- she decided to give it a try. After all, she knew the Denver Broncos played in Invesco Field...and had heard of Invesco Mutual Funds, a respected investment company.
So she was thrilled to get a letter offering her a $10,000 dollar loan...despite a steep upfront fee of more than $1,000.
Denise explains "the woman on the phone told me I had to pay $1,265 in insurance premiums to get the $10,000 loan." And she says the woman told her to wire it immediately.
How Advance Fee Loan Scams WorkDenise was concerned about the high fee, but it sounded like a legitimate offer. So she scrapped up all her cash, borrowed from her family, and headed to Western Union...to wire the money as instructed.
"She gave me a name of a Gabriel Miles....and his address...and he was in Ontario Canada," Denise says,.
She shows me paperwork stating that she wired $515....then a second amount of $595. But when she called to ask if the loan was on its way, she said the rep told her she'd have to wire another $500 "brokerage fee!"
That's when she became suspicious, and called the police....and me.
We checked into the company, and called the FBI, FTC, and Attorneys General in several states. We learned the New York Attorney General is investigating Invesco Lending. Authorities says it is not connected with Invesco Field or Invesco Mutual funds in any way, and may instead be what's called an "advance fee loan scam" based in Canada, where it is nearly impossible to track down and regulate.
Red Flags of a RipoffSo don't let this happen to you. Denise wishes she had seen the red flags earlier. They include:
• Loans offered with virtually no questions asked.
• A demand for hundreds of dollars in cash up front, without fully checking your credit history.
• A request that you wire the money by Western Union or similar service, which is untraceable and unreturnable.
• The loan issuer at first appears to be American, but then you discover they are based in Canada or some other foreign country.
Legitimate loan companies will ask for an application fee. But its typically not for more than $250, and they will accept a check...and give you a receipt. So don't fall for an advance fee loan scam, and don't waste your money.
