The Better Business Bureau is warning about what it calls a deceptive company offering consumers advanced fee loans.
People have reported losing thousands of dollars. They claim once they pay for that advanced fee, they never receive it.
When you see an "F" rating from the BBB, you know there is a problem with a company.
Lendwell Financial Services, based in Charleston, W. Va., has that failing "F" grade along with an alert. Tom Gallagher with the Richmond BBB said it appears the company is operating an advanced fee loan scheme. "We talked to a person from Midlothian who paid $450 for insurance, and this poor person is out that money," Gallagher said.
Gallagher said the company targets people in desperate financial situations. In order to get the loan, the company tells consumers they need to pay some sort of fee up front, usually hundreds of dollars. Consumers claim after they pay, they never see that loan. Complaint after complaint filed with the BBB shows the same problem, customers being charged a fee but getting nothing in return.
"If you have to pay any money out front as an advanced fee to get a loan, back off. Don't mess with it. These things are trouble," Gallagher said.
The BBB has not been able to get in touch with the company to address the allegations. We also reached out to Lendwell Financial Services but the phone number listed was disconnected and a web address we found online didn't work. While the company claims to be located in West Virginia, the BBB says it's probably a bogus address. "They could be located anywhere. They could be located inside of a post office or a drop off box at one of the UPS stores, where they have mail boxes for rent," Gallagher said.
The Federal Trade Commission reminds consumer it's illegal for companies to call and promise a loan or credit card and ask them to pay before they deliver. Also, keep in mind, legitimate lenders may charge fees but those charges will be made clear and the money will be taken from the amount you borrow. "When we think it through logically, why would we have to pay money to be able to borrow the money?" Gallagher said.
The BBB warns many times deceptive companies will ask you to load money on a GreenDot card or another type of prepaid card, or to wire funds through Western Union because those methods can't be traced. As a rule of thumb, before you do give up your cash or private information, research the company with organizations like the BBB. If you've already given up your money, you should file a complaint with the BBB.