Loan scams hit county
By 03/13/2003 00:00:00
‘Work at Home' pyramids also exposed
The Ellis County Press
ENNIS - Marilyn Mack was too informed to fall victim to a loan scam recently ran across the country by a bogus Canadian firm.
Mack, an Ennis resident, was approved by Stonebridge Financial Corp. to receive a $140,000 loan with a 9.3 percent interest rate, all with no down payment.
The only catch was she and her husband would need to send the firm a copy of their driver's licenses and a check for $1,657.87.
'He spoke very low, but I think he said the money was to pay for disability insurance and some other type of insurance,' said Mack.
Mack said the man told her once he received the check from the Macks, they would receive the loan from him within 8-10 days.
The 'no down payment' policy and the subsequent request for up-front money immediately tipped Mack off, who remembered hearing a warning on CNN from Alan Greenspan about this type of loan scam.
'He [Greenspan] said ‘don't [ever] send money',' said Mack.
She said Greenspan warned it was against the law for telemarketers offering a loan to ask for any fees in advance.
The Macks are selling their home to buy a new home and
called Stonebridge after seeing an advertisement for personal, mortgage, business, and commercial international loans in The Ellis County Press.
After Mack alerted The ECP, a check with the Texas Press Association revealed a recent warning from the South Dakota Press Association directing Texas newspapers to contact the South Dakota Attorney General's office if they had any contact with Stonebridge.
'It is a scam,' said Jaci Konop, a representative for the attorney general.
Konop said SDAG Larry Long has been warning consumers about advance-fee loan schemes.
'In a typical scenario, a consumer will respond to an advertisement offering loans. The ‘lender' then promises to provide a loan, but requires the consumer to wire or electronically transfer an up-front fee,' states the SDAG warning.
'These fees are often called, ‘insurance,' ‘security,' or ‘processing' fees.
'In other instances, the lender may require prepayment of a monthly installment.
'Consumers should be wary of paying up-front fees for a loan,' stated Long.
'That's a huge red flag for a loan scam.'
Some common signs of loan scams are:
· The lender is based in Canada.
· The lender requests funds to be sent by wire transfer.
· The lender 'guanantees' a loan or credit, even if the borrower has credit problems.
Konop said a national call center out of Canada, named Phone Busters, gathers information for law enforcement to combat telemarketing and other types of fraud.
Detective Staff Sergeant Barry Elliott of Phone Busters said their organization has five reported files on the phone number Stonebridge uses. The files show losses for individuals ranging from $604 to $105,000.
The organization is a combined effort of the Ontario Provincial Police and the Royal Canadian Police.
'Call Phone Busters if you are not sure if it is a scam,' said Elliott.
Elliott said all these up-front-fee type of loan offers over the phone are phony. He said the advertising for the loans are paid with stolen credit cards.
He said another type of widely-advertised scam, also seen recently in Ellis County, is the 'Work-at-home' scam.
Another Ennis resident recently responded to an 'address envelopes at home' ad and soon discovered it was a pyramid scheme.
'The majority of those work-at-home ads are scams,' said Elliott.
'The best thing we can suggest is for people to contact their local businesses and ask if they have work that can be done out of homes.'
Mack said she was supposed to get back with Stonebridge Financial last week to finalize the loan, but hasn't contacted him since.
'He called us back today [Monday, March 10] and said, ‘We have reevaluated your information and can offer you 5.2 percent, if you send your money within 10 days.''
She told him, 'We decided we are not going to do business with you.'
Phone Busters can be reached at 888-495-8501 or on the Internet at www.phonebusters.com.