Five Tips to Avoid the Advanced Fee Scam

Harrisburg, PA – As the busiest time of year for shopping quickly approaches, Secretary of Banking and Securities Robin L. Wiessmann urges shoppers to be wary of criminals that will leverage trust to steal a victim’s money.

“At the department, we typically see an increase of reports of fraud leading into the holidays, and the advance fee scam is especially on the rise,” Wiessmann said.

“Consumers should to be cautious,” she said. “Anyone can be targeted.”

The holiday season is a time when people might be more in need of a loan or other type of quick cash. An advanced fee scam occurs when a con artist uses slick presentations via phone, email, classified ad, website or social media to trick victims into paying large upfront fees for bogus loans, contracts, loan modifications, investments, lottery winnings or other promises of free money. The criminal takes the fee and then disappears.

According to the Better Business Bureau Scam TrackerOpens In A New Window, there were 20 advance loan scams reported in Pennsylvania in 2018; in 2019, 31 cases of advance loan scams have already been reported to date. According to the Federal Trade Commission Sentinel NetworkOpens In A New Window, so far this year in Pennsylvania there have been 3,044 reports of prize/sweepstake/lottery scams, which are all a type of advance fee scam. Because victims are reluctant to report, these scam numbers are likely much higher.

Five Tips to Protect Yourself

• Never pay up-front for a loan or credit, especially by wire transfer or to another country. Such payments are extremely difficult to recover or trace.
• Research with whom you are dealing before taking any action. Check license status by calling 1-800 PA Banks or searching the company name at https://www.nmlsconsumeraccess.org/Opens In A New Window.
• Don’t believe in a guaranteed loan. Legitimate lenders never guarantee a loan before you apply, especially if you have bad credit, no credit, or a bankruptcy.
• Never pay a “finder’s fee” upfront for suggested financing arrangements.
• Be cautious of a business contact that uses a post office box, mail drop or no direct phone number you can call.

Anyone can ask questions or file complaints about financial transcations, companies, or products services online or by calling 1-800-PA-BANKS (or 800-600-0007). Members of the public can stay informed about fraud and scams by following the Department of Banking and Securities on FacebookOpens In A New Window or TwitterOpens In A New Window or by subscribing to the department newsletterOpens In A New Window.

Additional Resources

DOBS Protect Yourself. Protect Your Money

FTC Advance-Fee LoansOpens In A New Window

SEC Advance Fee Investment Fraud