Advance-Fee Loan Scams

If you’ve seen advertisements in the newspaper, or on the web, that offers you a guaranteed approval on a credit card or loan without regard for your credit history, then you may have seen an advance fee loan scam. These advance fee loan scams prey on consumers who are looking for a loan but do not have good credit scores or a good credit history. They promise a quick and easy loan approval in exchange for fees paid up-front by the loan applicants.

If you have seen these advertisements, or received them by email, you may think that this offer is too good to be true. Well, it is. Regardless of how legitimate this an advance fee loan offer may appear, it is a scam designed to part you from your hard-earned money. Some scams will go so far as to design professional-looking websites and letterhead, with fraudulent logos of legitimate banks or even government agencies. You may be asked to provide information through a website, or to wire transfer money to a party overseas before the loan is approved, in order to pay for “loan insurance” or “application processing.”

If anyone asks you for a payment up front in order to process your loan, there is a good chance you are dealing with an advance-fee loan scam. Here are some other tip-offs according to the FDIC:

  • A lender who doesn’t care about your credit history. Legitimate banks and lenders pretty much always check your credit report before offering you a guaranteed approval to anyone, let alone someone with bad credit.

  • Charging advance fees before approval.
    Legitimate lenders will sometimes charge fees associated with your application, however these fees are disclosed clearly in advance of your application, and take their fees after your loan has been approved, most often out of the amount you borrow (for example, points on a mortgage. Particularly if they ask you to wire money or send money orders to an individual, be very wary. Legitimate banks will never ask you to do that.
  • A loan that is offered by phone, or ask for your Social Security number or bank account numbers. It is flat-out illegal for businesses who conduct business by phone to promise you a loan, and then ask for payment before they deliver.
Save for Your Future

If you think you’ve been victimized by an advance-fee loan scam, you can report it to the FTC. Online advance fee loan scams can be reported to the Internet Crime Complaint Center at


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