FOR IMMEDIATE RELEASE:  Thursday, October 07, 2010
CONTACT:  Paige Wilbur,  (605) 773-3215

Attorney General Jackley Warns of Advance Fee Loan Scams

PIERRE, S.D.-   Attorney General Marty Jackley and the Consumer Protection Division are warning consumers about advance fee loan schemes.

In the typical scenario, a consumer will respond to a print advertisement or an internet site offering quick loans. The “lender” then promises to provide a loan, but requires the consumer to wire or electronically transfer an up-front fee. These fees are often called “processing” fees. In other instances, the lender may require prepayment for the first several monthly payments.

“The first sign that these offers are not legitimate is that the loan providers are ready to give away loans to people irrespective of their credit history,” said Jackley. “Legitimate lenders may require you to pay application or credit report fees, but these fees are never required before the application is completed. Also, the fees are generally made payable to the lender, not the broker of the supposed ‘guaranteed’ loan or extension of credit.”

Consumers who have fallen victim of this type of scam or have any questions about these loan offers should contact the Consumer Protection Division at 1-800-300-1986.