In a hurry to get your refund? Some tax preparers offer tax refund anticipation loans, often marketed as “rapid refunds” in the form of checks or “gift” debit cards.

The Better Business Bureau (BBB) advises consumers to be wary of these costly loans. They deliver refunds only slightly faster than the IRS.

Refund anticipation loans are similar to payday loans: They’re short-term loans with high interest rates that can range from 50 to 500 percent. In some cases, they have hidden administrative fees. If the tax preparer makes a mistake in calculating your refund, borrowers could be required to pay fines and fees, too.

“Consumers may assume that the loans will be paid off quickly when their refund arrives, but if the refund is less than the loan, consumers will have to repay the difference, plus fees and fines,” said Kim States, BBB president and CEO.

The IRS usually delivers refunds in as few as 10 days after a consumer files a tax return, if the consumer files the return electronically and takes the refund by direct deposit to a bank account. The speed makes most refund loans unnecessary.

This year, the IRS has another option for refunds if a consumer doesn’t have a bank account: a prepaid debit card. The cards, available only by invitation, can be used to get money from ATM machines or to buy goods and services from retailers. The cards arrive faster than checks, the IRS says, and may allow consumers to avoid check-cashing fees.

The BBB advises consumers to be wary of two common tax-time schemes:

Tax reduction schemes are promoted by companies that claim they can help consumers reduce what they owe the IRS by working on their behalf with the IRS. However, the BBB has taken complaints from consumers who paid thousands of dollars to such companies only to find out that the companies didn’t reduce the amount they owed and, in some cases, had never contacted the IRS.

BBB advice: If you have a debt with the IRS, consult an IRS enrolled agent, a certified public accountant or a tax attorney to determine whether you qualify to file for anything other than paying your taxes, fines and penalties in full.

Phishing e-mails may say that there’s an issue with taxpayers’ refunds, that they are being audited or that a problem is delaying processing of their taxes. Many include a link to a website set up by scammers, where victims are asked for Social Security numbers, bank account or credit card (more…)

Whether you’re interested in a modeling career, just want to make a few extra bucks or you think your child might have a future in acting or modeling, be on the lookout for scammers. The Better Business Bureau warns that some modeling agencies are just trying to make a fast buck and don’t deliver on promises of fame and fortune.

In the last three years, would-be models have researched agencies with the BBB more than half a million times. Unfortunately, BBB also received more than 2,000 complaints from people who feel they were misled by an agency into paying large upfront fees—often for headshots and portfolios—and received little or no modeling or acting work in return.

“Modeling can be a great way to supplement your income, but signing up with a deceptive talent agency can be a waste of time and money or, in the worst case scenario, put you in physical danger,” said Kim States, BBB President. “Even if the agency tells you that you have ‘the look’, always take the time to do your research and don’t fall for empty promises.”

Common complaints to BBB about talent and modeling agencies often come from would-be models or parents who think their kids have star potential. Typically, they are told they need to pay upfront fees—such as for headshots—after which the agency will start finding them work. Complainants report that despite paying hundreds or even thousands of dollars in various upfront fees, the agency found them few, if any, jobs.

In an extreme example of a modeling agency opportunity gone horribly wrong, the BBB in Louisville has received complaints from local men who paid hundreds of dollars in upfront fees—or became indebted for these fees—to Models Today in exchange for the promise of landing modeling jobs. Instead, the young men stated that the owner, Russell Claxon, took shirtless photos of them in a park and never set them up with any jobs. Several complaints to BBB made reference to solicitation for (more…)

According to complaints filed with the Better Business Bureau, victims across the country have lost a total estimated quarter million dollars to advance fee loan scams this spring. Advance fee loan scams target individuals and small business owners who are desperate to get a loan and often take the victim for thousands of dollars.

Despite recent improvements, the economy continues to provide a great opportunity for scammers to take advantage of struggling individuals and small business owners. Lending standards remain stringent at most banks and many cash-strapped individuals are turning to fraudulent lenders that promise loans regardless of your credit history.

“Schemes preying on people looking for loans are not new, and they are flourishing in an economy when so many are struggling to get by,” said Kim States, BBB President. “The complaints received by BBB are only the vocal few and we know from experience that many more people across the country are falling for this scam every day—just when they can least afford it.”

BBB has recently received complaints about advance fee loan scammers operating under more than 75 different names including Capital Alliance Financial Group, Harford Financial Services, Howard and Clark Financial, Lending Hand Financial, among others.

Most people stumble upon the scam online or learn about the bogus loan offer from ads in local Thrifty Nickel publications and online through classified sites like Craigslist. Often, an advance fee loan scam website will be created and taken down within a couple weeks only to be replaced by another operating under a different name and fake business address.

The websites look professional and might even put the victim through the rigors of filling out loan application forms—often requiring the victim’s bank account and Social Security numbers. Eventually victims are told they are approved for the loan and just need to pay as much as thousands of dollars upfront via money order or wire transfer to pay for insurance or collateral. Those that pay never get the promised loan and are even sometimes tricked into giving 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 in your state to do business. Check with your state financial or banking regulators.

• The lender asks you to wire money or send a money order—such as for insurance or collateral—before you can receive the loan. You might be told 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 your local Better Business Bureau and report the incident to your police department.