A Medicine Hat woman applying for a loan ended up losing more than $3000 in a common advance-fee scheme, and Better Business Bureau is sending out an alert.
BBB Serving Southern Alberta and East Kootenays was contacted by the victim after she reportedly sent four successive payments totaling $3381 in an attempt to secure a $10,000 loan from Avian Lending Solutions. The company, supposedly based in Cleveland, Ohio, requested the money for insurance, brokerage, exchange, and closing fees. It then failed to supply the loan and ceased communication with the consumer.
“Advance-fee loan schemes have been around for years, and they tend to target those least able to afford to lose the money,” said Daniel MacDonald, BBB spokesperson. “There is no reason why you should ever have to pay up-front for a loan – if there are fees, they should come out of the loan amount upon completion of the transaction.”
Investigation by both BBB Serving Southern Alberta and the Cleveland BBB have found the address listed on the company’s website and other contact information to be inaccurate. The website was launched in July, and is registered to a private firm out of Markham, Ontario that registers sites on behalf of companies in order to protect their identity. BBB has contacted this firm to report our findings.
Advance Fee Loan brokers should not be confused with mortgage brokers, who arrange real estate loans, or money lenders such as banks and credit unions. Loan brokers advertise in newspaper classified ads hoping to attract consumers or business owners with the promise of guaranteed, low interest loans to consolidate debts and clean up credit records.
Advance Fee loan brokers promise to assist their clients to locate and arrange financing. The customer is required to pay an up-front fee before the firm provides any service. The advance fee is generally a fixed dollar amount regardless of the size of the loan and is non-refundable whether the loan is approved or not. BBB files experience shows that few loans are granted by the majority of these companies.
Consumers that have paid an Alberta loan broker an advance fee are encouraged to contact BBB at medicinehat.bbb.org, and Service Alberta at 1-877-427-4088.