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Attorney General Mike DeWine
Ohioans Losing
Money to Loan Scams
(COLUMBUS, Ohio)—Ohio Attorney General Mike DeWine warned today that
Ohioans seeking extra cash following the holiday season should beware
of phony loan offers.
In 2014, the Ohio Attorney General’s Office received more than 200
complaints about advance-fee loans or credit cards, including many
potential scams. The average reported loss was approximately $500.
“In a typical loan scam, you find a loan for $1,000 to $5,000 but the
lender says you have to pay hundreds of dollars upfront to prove that
you’re trustworthy,” Attorney General DeWine said. “You send your own
money but you don’t receive anything in return. If you have to send
money in order to get money, it’s likely a scam.”
Several Ohio consumers reported losing more than $2,000 each after
trying to obtain a loan online. The consumers were told they were
approved for loans but first had to pay advance fees using prepaid
cards or money transfers. Although the consumers provided the payments,
they never received the loans.
Scam lenders use various phony reasons to explain why consumers must
make upfront payments, such as:
To prove the consumers can make the monthly payments;
For processing fees, taxes, or insurance;
To compensate for a low credit score;
For closing costs or bank fees; or
To secure the loan.
The initial fee in a loan scam is not the same as a down payment or
other cost associated with a legitimate loan. Scam lenders do not check
consumers’ credit history; they just promise a loan in exchange for
advance payment.
To protect themselves from scams, consumers should check for complaints
with the Ohio Attorney General’s Office and Better Business Bureau.
They also should be skeptical of lenders that ask for payment via money
transfer or prepaid money card. These are preferred payment methods for
scam artists, because once the money is sent, it is difficult to trace
or to recover.
Consumers who believe they have been treated unfairly or who need help
detecting a scam should contact the Ohio Attorney General’s Office at
www.OhioAttorneyGeneral.gov or 800-282-0515.
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