Attorney General's News Release

July 16, 1997

Nixon warns consumers to be on alert for advance fee loan offers from Canada

Jefferson City, Mo. — Attorney General Jay Nixon today warned consumers and businesses not to send money to Canadian companies promising guaranteed loans for fees in advance. Nixon said phony loan offers are a common practice used by con artists to get consumers and small businesses to send money in exchange for nonexistent loans.

"Consumers should not pay fees for loans they don't already have in their hands," Nixon said. "Anyone who offers you this type of loan violates state and federal laws and should not be trusted."

Nixon, whose office has recently seen a rapid increase in the number of complaints about advance fee loan offers from Canada, said fraudulent Canadian companies charge consumers $100 to $3,500 in advance fees and then fail to disburse the loans.

Deceptive advertisements that promise loans generally appear in the classified section of local and national newspapers and magazines. The ads may read, "DEBT CRISIS? We can help you! Debt consolidation up to $50,000. Loans, low interest, reasonable payments..."

"Scam artists operating advance fee loan scams target consumers that can least afford to lose money," Nixon said. "If you're experiencing credit problems and cannot obtain a loan through your local bank, it is unlikely that you will find a legitimate lender through a newspaper advertisement who is willing to take the risk."

Nixon gives consumers the following tips to avoid becoming a victim of an advanced fee loan scam:

• Be careful with your personal information, including Social Security, credit card and bank account numbers, among others. Fraudulent businesses could use this information to make an unauthorized charge to your credit card or to withdraw money from your bank account.
• Legitimate lenders never "guarantee" or say that you are likely to get a loan or a credit card before you apply, especially if you have bad credit, no credit, or a bankruptcy.
• Consult with your local bank before responding to loan offers. Bank personnel generally know a suspect loan offer when they see one.

For more information on consumer topics, or to file a complaint, call the Attorney General's Consumer Protection Hotline at 800-392-8222.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818