Consumer Safety & Awareness Part 20

(Continued from last week)

Examples of Advance Fee Scams (part 2)

Here is an actual example of such scam as reported on 914Legal.org.

“Last month, hundreds of internet users from places right across the US were done in by a scam perpetrated by a company calling itself The Fairway Lending Group. The company gave a false address and claimed to be operating out of 1699, Wall St., Mt. Prospect. It was careful to leave out local residents. The scam would have blown apart if any of the locals had found out that it was not occupying the said premises.
The company was especially targeting those with a poor credit rating. It offered a loan that was actually a scam molded on the advance fee type of scams.

The scam started when people responded to mails from the company that promised them easy loans. They were then asked for their bank account details presumably for processing of the loan request. The victims were next asked to make a payment as collateral for the loan. They were asked to make the payments through Western Union money transfer. The amount people paid ranged from $900 to $5000.

Users should have been warned when asked to pay any amount upfront before receiving a loan. Such loan schemes are actually banned in the US and in Canada. Any such loan offer would be illegal if offered in the first place.

Apart from money lost, the victims in this case, might also be exposed to identity theft, having revealed their bank account details to the fraudsters. The thing for them to do would be to either close the account or to give instruction to the bank if possible to temporarily suspend it.

As of now, there is no trace of the company. Local authorities claim to have no clue about their whereabouts. Being an Internet based scam, the fraudsters found it easy to hoodwink the police by covering their tracks.

Seeing an increase in scams, the Federal Deposit Insurance Corporation provides warning signs that may indicate a loan offer is not legitimate:
The loan approval is "guaranteed." Lenders do not typically guarantee loans before analyzing the applicant's financial condition, credit history and ability to repay.
The loan applicant is required to pay upfront fees to a third party or individual. Loan fees are normally paid to a business after the loan has been approved.
The lender or loan processor may be located outside of the United States.
Fees are requested using a retail wire transfer system. A password is sometimes used by the overseas receiver to pick up the funds in an attempt to hide the true identity of the criminals and make funds more difficult to trace.

Occasionally you have no idea you are paying anything. Ads may include phone numbers that generate telephone fees added to your phone bill. Some online sites require downloads that include a virus. It switches your Internet Service provider from what you are using to theirs, usually located overseas with huge fees.

Growing in popularity are death threat reports. Someone has hired a “hit” on you and the person who accepted the contract will not follow through if you pay him.

People outside the United States have to be aware of scams stating that the company can get people into this country. They provide employment offers in the US, targeted to people specifically living in India, although other places may be involved. These jobs have come from a variety of sources, but are usually traced or linked to a company based in the United States, that are information technology consultants, contractors or simply a specialist employment agency. These companies have clearly stated that they will "assist" or even outright claimed that they will "obtain" the necessary working permit visas on behalf of the proposed employee. Of cause, upfront fees are needed.

In some cases, the scammers ask that the person come to the foreign country directly to handle the transaction in person. The US Department of States warns: Over the past 3 years, 15 foreign businessmen (one American) have been murdered in Nigeria in AFF scams. Since September 1995, at least eight Americans have been held against their will by these criminals in Lagos that have come to the attention of the U.S. Embassy. In 1996 the U.S. Embassy helped repatriate ten Americans who came to Lagos looking for their “pot of gold.”