Attorney General Peter Heed today issued a warning to consumers to be extremely careful of advertisements that typically appear in newspaper advertisements and on the Internet inviting consumers to apply for a loan in which no credit check will be done.

The companies typically have an official sounding name, such as a realtor's name or a financial institution type name and requests anywhere from $500 to $2,000 upfront as a "processing fee."

Once the consumer wires their money to the company, usually to a location in Canada, that is the last contact the consumer has with the nonexistent company.

According to Attorney General Heed, the Canadian government has confirmed that there is a large ring involved in loan scamming and urges consumers to be particularly careful about these types of offers. "With the holidays approaching, there may be extra pressure to obtain loans, but do not fall for the bad ones," Heed warned

"Although we recognize there are many legitimate companies offering loans to consumers, unfortunately," Heed said, "there are as many who are victimizing very vulnerable consumers." Attorney Heed offers the following advice for consumers considering obtaining a loan:

1. Before doing business with any company, especially one offering what appears to be a "too good to be true" offer, consumers should contact the Banking Department, the Better Business Bureau and/or the Consumer Protection Bureau to inquire as to the legitimacy of the business.
2. Consumers should never provide personal information, such as Social Security Number, bank account numbers, or credit card numbers prior to confirming that a business is legitimate.
3. Consumers wishing additional information should contact the Consumer Protection Bureau at 271-3641.

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