Advance fee loan scam
Consumers were promised refunds if not 100% satisfied
Have you had difficulty obtaining a loan through normal sources? If so, you may become the target of an advance fee loan scheme. In this scam, a con artist offers you a "guaranteed" loan for a fee paid in advance.
“On the website, he would display prominent images of talk show hosts - Imagine household names - He would often say he had been on these shows,” explained US Postal Inspector William Zelmblidge.
What appeared to be endorsements from Montel Williams and 'The View' lured in as many as 30,000 victims of this particular scheme.
“Victims would say in witness interviews that they often relied on these endorsements as a reason they trusted this service,” said Zelmblidge.
But, the conman running these ads was never on those shows. His promise was this: For $99, his company - Golden Harvest - would send consumers with poor credit a list of lenders who "might" give them a loan. He also offered a 100 percent guarantee of satisfaction. What happened? Consumers got nothing for their money.
“He chose to offer this bogus service for $99 and part of this was calculated... it was enough for him to make $3 million over a short number of years, then again, victims may say 'I don’t know if this is worth my time'," explained Zelmblidge.
Thousands of complaints were sent by consumers by mail demanding their money back. In response, the conman in question would actually insult those who dared to complain.
“When people would take the time to write and complain about refunds that’s when he would take the time to insult their spelling, and its SAY why they don’t have good credit,” said Zelmblidge.
Postal inspectors began investigating after numerous consumers began complaining to the Better Business Bureau.
According to the BBB, "The advance fee loan scam is a simple one. In the United States, per Federal law, it is illegal for any business to request up front fees for loans. These fees are often referred to by a host of different names, such as taxes, processing fees, insurance or collateral. Regardless of what they are called, these fees are illegal."
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