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:

BBB Tips:

• 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. (more…)

Consumers across the nation have filed complaints with Better Business Bureau about a group of Connecticut-based companies involved in advance fee loan scams – loans that require upfront payment of fees in order to secure credit.

According to complaints filed with Better Business Bureau this spring, victims across the country lost an estimated quarter of a million dollars to phony lenders who took their money and ran, leaving the applicants in an even worse financial situation than they began with.

That is what happened to an East Haven, Connecticut man who wired more than $1,200 as a security deposit to a company calling itself Mont Samson Financial, for a $20,000 loan.

Despite recent improvements in the economy, lending standards remain stringent, leading cash-strapped consumers to turn to fraudulent lenders who promise loans regardless of the applicants’ credit history.

Complaints received by BBB are likely to be only the tip of the iceberg, according to Connecticut Better Business Bureau President, Paulette Scarpetti.

“We know from experience that the victims who file complaints with BBB represent a vocal minority, and that many other consumers across the nation may be falling prey to these schemes,” she said. “The worst part is that people being targeted are already suffering tremendous financial hardship.”

BBB recently received complaints about advance fee loan scammers that create, steal or modify more than 75 different company names for their operations, including Acclaim Equity Group, American Linx Financial, Capital Alliance Financial Group, Hartford Financial Services, Hazelton Financial, Howard and Clark Financial, Mont Samson Financial, Transgroup Services and Trillium Investment Lending, among others.

Advance fee loan scammers are known to illegally use names or slightly altered versions of names of legitimate companies to lend credibility to their sales pitches.

Most victims stumble upon advance fee lenders online in classified ads on sites such as craigslist.com, or in local Thrifty Nickel publications.  Advance fee loan operators try to stay a step ahead of legal action by putting up Web sites for limited periods, taking them down within a few weeks and replacing them with a new site under a new name and fake business address.

The Web sites look professional and often require the victim to fill out an application form that asks for bank account and Social Security numbers. The applicant eventually is told the loan is approved and required to pay thousands of dollars in upfront fees, supposedly to cover the cost of loan insurance and as collateral.  The victim never receives a loan and may even be tricked into paying the scammers even more money.

BBB advises cash-strapped individuals and small business owners to recognize the red flags of an advance fee loan scam

• The lender has a bad reputation—or none at all.  Research the lender thoroughly online and with your BBB. Most trustworthy lenders have an established track record; be wary if you can’t find much information about the lender online.
• The lender is not registered to do business in the state. Check with state financial or banking regulators.
• The lender asks you to wire money or send a money order before you can receive the loan. If you are instructed to wire money to another country consider this yet another red flag.

If you’ve become a victim of an advance fee loan scam, contact BBB by calling (520)888-5353 or visit, www.tucson.bbb.org, and report the incident to your police department. 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: info@phonebusters.com.