The Governor's Office of Consumer Protection is alerting consumers to be especially careful during the holidays about borrowing money and becoming victims of loan schemes.
The office is getting reports of loans advertised online. When the consumer submits an application, he/she then receives phone calls from someone claiming to be a representative of an out-of-state bank saying the applicant has been approved and explains that he/she must now pay a $120 processing fee via Green Dot MoneyPak card, according to the consumer protection office.
After the consumer pays the money as instructed, the caller then asks for $300 for another processing fee. If the consumer pays that fee, the caller keeps asking for yet more fees. The victim never ends up getting the loan, yet has paid several processing fees.
It is a violation of Georgia's Fair Business Practices Act for someone to use telemarketing tactics to defraud someone or commit theft. Any bank that violates the law can be reported to the Governor's Office of Consumer Protection, the Attorney General's Office and the Department of Banking & Finance in the State in which the bank is headquartered.
Anyone who gets a call about an offer involving questionable lending practices can report the incident to these agencies: Federal Trade Commission, the Federal Reserve and the Consumer Financial Protection Bureau.
The Governor's Office of Consumer Protection pointed out that Green Dot MoneyPak funds are not insured against loss, according to its website. MoneyPak suggests to customers that treat MoneyPak like cash so once it is lost, it isn't traceable or recoverable.
The Governor's Office of Consumer Protection offered these tips when trying to get a loan:
Don't pay up front. Legitimate lending terms generally do not require an upfront fee, according to the GOCP. Fees are taken from the amount borrowed after the loan is approved.
Be wary of promises for loans regardless of credit standing. Those with poor credit or a short credit history are unlikely to get reputable company will lend you money.
Do business with licensed companies. Find companies that comply with Georgia's lending requirements by going to the Dept. of Banking and Financing http://dbf.georgia.gov/general-information if the lender operating in Georgia has complied with the licensing requirements.
Consider a co-signer if you are unable to get a loan yourself. A co-signer, usually a friend or relative, is someone willing to apply with you for a loan. Both are equally responsible for the loan payments.
Get all the costs and other details before making a decision. Shop around for the best loan rates and fees.
Get proof of loan terms that are promised. Get the loan agreement in writing or in an electronic form. This is to prevent the lender from changing the terms of the loan agreement.