|For Immediate Release
|February 18, 2004
||Contact: Cheryl Weiss
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."