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Consumer Alert: Advance Fee Loan Brokers Consumers experiencing financial problems and unable to get a loan might be tempted to respond to advertisements which offer to provide a loan regardless of credit status. While this might sound like the answer to financial woes, the Department of Government Services and Lands advises consumers to think again. Carol Furlong, supervisor of trade practices, warns consumers to be wary of these offers which usually require an up front fee. Ms. Furlong said: "Consumers in this province have reported losing hundreds of dollar. They paid the fees but never got the loans." Such offers, which have appeared in the classified sections of local newspapers, are usually made by loan brokers operating in Ontario and Quebec. Loan brokers do not lend money themselves, but, for a fee, will offer to arrange loans for consumers. Ms. Furlong said: "Advertisements offering to help you acquire a loan regardless of your credit history should be viewed with skepticism. A suggestion that your credit history will not be taken into account when applying for a loan should sound alarms. The fact that an advance fee is required is an indication that the consumer is at risk of losing money. "Although several loan brokers involved in such scams have been charged and convicted, consumers who paid out money were not compensated for their losses. Consumers can protect themselves from such scams by not paying a fee up front for such loan offers. They can also check with consumer officials at (709) 729-2600 to determine if the people they are dealing with are legitimate." Contact: Carol Furlong, Supervisor of Trade Practices, (709) 729-4196, or Rick Callahan, Director of Communications, (709) 729-4860.
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