Press Releases


For Immediate Release
February 18, 2004 Contact: Cheryl Weiss
(608) 264-7875

DFI Warns of Investment Scam

(Madison) The Wisconsin Department of Financial Institutions (DFI) would like to take this opportunity to warn consumers of a recent scam hitting Wisconsin and other states. This scam deals with loans, more specifically "advance fee" loans. The entity offering these loans is illegally operating without a license or charter. In fact, the entity misrepresents itself by using the name of a legitimate savings bank in another state, unbeknownst to that savings bank. In addition, customers are not informed that the contact numbers provided in the ad are actually numbers belonging to a company in Canada.

Loan scams can bring in millions nationwide in a very short time. "Unsuspecting people send in a fee in return for a promised loan. Because interested individuals are often in debt trouble, the loss of the fee through this fraud is especially devastating," said Lorrie Keating Heinemann, Secretary of DFI.

An advanced fee loan is where someone places an ad offering to make a loan. People responding to the ad are told that they need to send in a fee to receive the loan. The people sending in the fee never receive the loan and the scammers disappear with their money.

Most legitimate lenders don't offer loans in classified ads. Consumers can help themselves by asking the following questions:

  • Are the seller and investment licensed and registered in Wisconsin?
    • Call DFI to find out at 1-800-47CHECK, or visit our website at www.wdfi.org. If they are not, they maybe operating illegally.

  • Has the seller given you written information?
    • Make sure you get proper written information. The documentation should contain enough clear and accurate information to allow you or your financial advisor to evaluate and verify the particulars of the investment.

DFI has an easy-to-use consumer complaint form for persons wishing to file fraud complaints against mortgage bankers, mortgage brokers and loan originators. The complaint form, as well as guidelines for completing the form can be found online at http://www.wdfi.org/fi/mortbank/mbapp.htm

"Always do your homework before making any investment," Secretary Heinemann said. "If it's too good to be true it probably is."