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Even The Financially Aware Can Fall Victim To Loan Scams

by Jim ONeil on April 19, 2011

in Personal Finance Tips

The sad truth is that there are con artists throughout the globe. Recently, the spotlight has been on New Zealand, where some high profile businesspeople were duped by scammers dangling too-good-to-be-true investment opportunities.

In that country alone, 400 reports of such scams have already been made this year.

Some scams come in the form of a letter from a diplomat in another country who claims to have access to large sums of money. In exchange for providing their bank account information, recipients will receive a share of the funds.

When recipients reply to the email, they are asked to provide some money upfront for legal expenses. After doing so, their money and the contact vanish.

Though many astute individuals may not fall for this scam, they could easily become victims to schemes that seem to be legitimate opportunities for investment backed by international banks. People who need funding are contacted and promised loans bank offered that do not need to be repaid.

For each dollar borrowed, one dollar will be invested in a high-yield bond and used to repay the loans.

Individuals are asked to provide a check for administration and legal costs. Once they do, the con artist cashes the check and disappears. Situations like this are similar to Ponzi schemes that encourage

people to sink money into investments that are sure to yield huge returns.

Their money is not invested in a legitimate venture and the returns are paid to the original investors, attracting others.

This type of fraud runs rampant online, making it necessary for everyone to be wary. If someone offers a program with a rate of return that seems too impressive, it probably is. Anyone asked to invest in an unknown program should understand its business model and risks.

They should also research the promoters, verify the associated bank, and get a credit check for the company.


these little loan companies are quite the scammers and probably not worth your time, the 49.99 is what they want from you before they credit check you or anything like that. You look good enough for them to give you a loan but the rate/loan itself isn't 100% guaranteed and you may have to wait quite a while for the money also.

Stick to going to a bank, preferably one you already hold accounts with and if they say no then most others will say no also.

Oh and never give them your mobile number, they will bombard you with calls and texts offering loans forever, i still am about 2 years on but luckily i never actually went through with it and didn't pay them any money.

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