With the high cost of living, some people are feeling financial pressures and that could mean you may need to take out a loan.
If you do take out a loan, watch out for the advance fee loan scam. That’s when you’re told to pay a fee upfront to get a loan but then it never happens.
Lynda Bayley, of Pickering, Ont., said she needed a loan to try and get her finances back on track and she found a company online that said it could loan her $20,000, but she had to pay $4,000 in advance.
“They came up (in an online search) and I read all their stuff about them and people gave good reviews on them,” said Bayley.
However, once Bayley paid the company $4,000 in advance, she never got the loan.
“I’m losing my car, I’m losing my home, I’m losing my animals. I’m losing everything,” said Bayley.
The company Bayley gave the money to was Dynamic Resource Solutions. CTV News Toronto emailed and called Dynamic Resource Solutions but did not get a response.
The Better Business Bureau (BBB) of South-Central Ontario said it has received other complaints about Dynamic Resource Solutions from people who said they also paid in advance for loans but never received them.
“It’s illegal in Ontario to ask for advance fee for any type of loan,” BBB President of South-Central Ontario Angela Dennis said.
Dennis said scammers often target people who have credit issues and who might not be able to get a loan through a traditional lender.
“When people are paying these fees, they are told it’s for insurance purposes or an administration fee and consumers are sending in their money and they are not receiving the loans,” said Dennis.
To avoid the advance fee loan scam beware if a loan is guaranteed and a credit check is not necessary. Be suspicious if you’re asked to pay fees or a deposit in advance such as insurance or processing charges and the company doesn’t exist at a physical address.
Bayley is now in a worse financial situation since being scammed out of $4,000 and she still has bills that need to be paid.
“If I can’t get my money back. I can’t get it back, that’s just the way it will be. I just don’t want them scamming other people,” said Bayley.
It’s easy to make websites and loan documents that look legitimate, but it doesn’t mean they are. Also, be cautious of reviews of loan companies as chances are some are fakes.
