Financial scams include debt consolidation offers

The number of Americans who have trouble making ends meet seems to increase daily; we build increasing amounts of debt and have a more difficult time paying it. Many consumers try to get out of debt problems by filing for bankruptcy, signing up for credit guidance, or by obtaining a debt reduction loan, but the problem just appears to be getting worse. Debt consolidation scams and other financial scams are prevalent, so watch out.

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Adding to the problem of rising debt is the increasing number of "lenders" who are stealing from consumers with money struggles and bad credit. There have been quite a few examples in the news lately of people who have been victimized by companies that promised to loan money to people with poor credit. When people called to sign up for the loans, they were informed that they were approved, and all they needed to do in order to get the money was to submit payment for three months worth of payments in advance. These debtors, many of whom planned to spend the cash to consolidate their debt, applied for these loans by trusting the lenders. The companies claimed that they would lend cash to "anybody", and that they specialized in lending to Americans with bad credit.

Those customers who replied to advertisements by scammers never received the cash and never were contacted by the "financial institution" again. Scams and fraud of this type seems to be expanding as fast as the bills the individuals want to use them for. These companies weren't fly by night companies that were promoting on phone poles; these were companies that actually had advertisements in the Yellow Pages, a source of advertising that consumers normally trust.
 

Following are some suggestions you should think about when applying for a loan, especially one that is unsecured:

• No professional bank is going to promise that you will qualify before they actually check your credit history or score. There is no such thing as a "guaranteed" loan. Avoid lenders that inform you that you will not be turned down. Be suspicious if the lender asks you to hand over a fee to apply for the loan, as applying should be free.
• Paying fees by wire transfer, such as through Western Union, can't be traced in case of a problem. Wiring money is a poor way to submit money and a sure indication that something will go wrong. Many unscrupulous lenders will require that you send money to them by wire transfer.
• Paying off on a fixed schedule is reasonable, but repaying before you have received the cash is not. A loan is an offering of money; you shouldn't have to pay so that you might get the funds. Avoid financial institutions that want you to pay a fee in order to receive the funds.
• If you have to obtain funds, try to use a lender that can be honestly recommended by someone you know. Obtaining funds from a trusted source is safer than just randomly dialing a phone number from an advertisement.

It is unfortunate that there are a lot of consumers out there that want to take your cash. Before doing business with a lender, do a bit of research, as it might save you a lot of heartache. Stealing your money that is precisely what these dishonest people seek to do, and you need to do your best to avoid becoming a victim. No one is going to look out for you, so you need to take a proactive view of the problem in order to protect yourself. It is much easier to attack the problem head on than it is to fight it once you have become a victim.