BBB Warns of Advance Fee Loan Company, Billerica Financialby Nick LaFleur on Feb. 13, 2012, under alert, Life, scam, Tips
Better Business Bureau of Southern Arizona is warning of advanced fee loan company, Billerica Financial, allegedly located in Auburn Massachusetts. BBB was made aware of Billerica Financial after consumers contacted BBB to inquire about Billerica Financial’s business practices.
Billerica Financial, which markets itself nationwide, offers personal loans for an upfront fee of over $800, with no request for verification of ID, date of birth, social security number, or any type of collateral. BBB attempted to contact Billerica Financial by phone and by mail to inquire about the business. The company provided no response.
The business website states their address is 48 Sword Street in Auburn MA. This address is occupied by an unrelated legitimate business. Billerica Financial is not licensed by the Massachusetts Division of Banking, or by any other state, to disperse loans, as is required by law
BBB recommends that consumers shopping for a loan look for the following red flags of an advance-fee loan scam:
Red Flags: Be wary of:
- Guaranteed approval. It’s a warning sign if the company promises loan approval before the borrower applies.
- Pressure to act immediately. Advance fee loan schemers will try to get consumers to send money or give out personal information (bank account information, credit card and Social Security numbers) before providing any paperwork.
- Hidden fees. Be suspicious if the lender understates loan costs or won’t provide a written summary of all fees associated with the loan.
- Evasive tactics. Be wary if a company refuses to provide location information. If they hesitate to reveal their physical location, it is usually a ploy to avoid law enforcement detection.
- Internet lenders. When applying for loans online, the consumer may have to fill out a detailed application; providing bank account information and other personal details. If the lender does not abide by strict privacy policies or fails to secure their website, identity theft risks abound. Additionally, some internet lenders may attempt to bypass state usury, licensing and consumer protection laws by residing in states with lax regulations or outside the U.S.
- The lender is not registered in your state to do business. Check with the state’s financial or banking regulators.
- The lender asks you to wire money or send a money order before you can receive the loan. You might be asked to wire money to another country. Consider this a giant red flag.
The BBB recommends the following tips when shopping for a loan:
- Don’t buy into bogus loan promises. If a loan offer is made and you must pay to get access to the funds, it is a scam. It is illegal for telemarketing loan providers to offer a loan and require an upfront payment before it is issued.
- Never wire money or send money orders to obtain a loan. Legitimate lenders won’t pressure you to wire funds. Never send funds to a third party.
- Be wary of loan approval or financing guarantees. Be suspicious of any lender that pre-approves loans or financing without checking your credit status or contacting references—especially if you have bad credit or no credit record.
- Don’t pay for a referral. Beware of referral service companies that promise to connect you with “guaranteed” lenders, creditors or loan officers for an upfront fee. Instead, contact potential lenders or financial institutions directly to discuss options.
- Avoid copy-cats. Be on the lookout for forged paperwork and websites; scammers often mimic legitimate organizations or use well-known or common business names.
- Question their “connections.” Many of the schemers using telemarketing to promote loans have no connection to established financial institutions. Ask which lenders the “loan broker” deals with, and ask for the lender’s physical address. Contact purported partner companies to confirm affiliations.
- Research the business. Take time to examine the company and collect information on the opportunity. Refuse to do business until you have their physical address or location and can research them online. Get free BBB Reliability Reports on lenders and other businesses at www.bbb.org
- Review qualifications. Lenders and loan brokers should be registered in all states where they do business. To verify, call your state’s regulatory and licensing offices.
- Collect paperwork upfront. Before applying for loans or credit, expect a written contract or agreement. Make sure all verbal guarantees, details, fees, terms and timelines are enclosed. Under the Truth in Lending Act, all loan costs should be clearly and prominently disclosed in writing.
- Apply with caution. Before giving out your credit card, bank account or Social Security number, find out why the information is necessary. Verify the company’s credibility before applying or giving out any personal details.
- Don’t make loan payments to an individual. Payments should only be issued to a legitimate lender or authorized borrowing institution.
- Look at other financing options. Consider an advance on pay from your employer, or a small loan from a family member, friend, credit union or other lender.
- Ask for a deferment. Ask creditors for more time to pay bills. Find out what charges apply: Will there be a late charge, additional finance charge or higher interest rate?
- Get debt assistance. If facing financial troubles, contact a local consumer credit counseling service for help. Many non-profits charge small fees or no costs. Try using BBB’s free online program Managing Credit – Made Simpler.
If you’ve become a victim of an advance-fee loan scam, report the scam with the following agencies:
Report Scams: Advance-fee loan scheme victims can file complaints with the:
2. Internet Crime Complaint Center if the scheme occurred online or by e-mail.
If you were asked to wire money to Canada, file a complaint with Canadian law enforcement by calling toll free: 1-888-495-8501 or e-mail: firstname.lastname@example.org.