Blog: Advance Fee Loans Are Illegal

Added February 7, 2008 by Melanie G. Rogers

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Did you know it's illegal to ask borrowers to pay a fee before getting a loan?

Chicago's Better Business Bureau just warned consumers about a scam where borrowers are asked to wire fees ranging $900 to $5,000 before they can receive their loan proceeds. Needless to say, the loan money never arrives.

When the borrower contacts the company, Fairway Lending Group, he's told that he has to pay additional fees before he can get his money.

Appearances can be deceiving. Apparently Fairway sends out very official-looking forms and documents which leads borrowers to think it's a legitimate company.

Before you borrow money you may want to call the Better Business Bureau to see whether there have been complaints filed against a lender. You can also go to your state government's Web site and figure out who regulates banks and lenders. Then call them to see if complaints have been filed.

Feb. 7, 2008.

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