HARRISBURG, Pa., Dec. 8, 2017 /PRNewswire-USNewswire/ -- Many Pennsylvanians may find themselves looking for solutions to a cash crunch during the holiday shopping season. However, Secretary of Banking and Securities Robin L. Wiessmann urges consumers to avoid the "pay upfront scam" for bogus loans or credit cards.
Wiessmann explains how this scam works:
- The con artist will target people with poor credit histories by promising easy or "guaranteed" approval. However, to take advantage of the offer, the victim must pay high but seemingly legitimate fees for the application, insurance, or other "services." In the end, the con artist takes off with the fee and the victim gets nothing in return.
- People encounter advance fee scams in a variety of ways, including telemarketing calls, text messages, emails, well-designed documents, classified ads, and the Internet, including social media.
Wiessmann points to three strategies that can help consumers avoid being robbed by upfront payment scams:
- Avoid any credit offer that requires an upfront payment. Although a lender may charge application, credit report and other fees, they are generally subtracted from the loan amount after it is approved.
- If you are asked to pay fees via a wire transfer or prepaid debit card, especially to someone in another country, exercise caution. Such offers are normally a scam, and the payments are extremely difficult to recover or trace.
- Know who you are dealing with. If you have not heard of the person or company, take the time to learn more about them. Contact the Department of Banking and Securities at 1-800-PA-BANKS to ensure the lender is properly licensed to do business in Pennsylvania.
"I cannot stress enough that consumers are taking excessive risk by doing business with unlicensed, out-of-state lenders," said Wiessmann. "Lenders licensed by the Department of Banking and Securities know Pennsylvania law and understand how they should treat their customers."
In wrapping up the department's "Holiday Scam Protection Week," Wiessmann urges consumers to be informed. Know the "red flags" of scams and fraud and who you can contact if you believe you are a victim. Check out the publication: "Scams: Protect Yourself. Protect Your Money" www.dobs.pa.gov/Documents/Publications/Brochures/Scams%20Booklet.pdf
"Although scams may take different forms, the underlying method is often the same: preying on emotions, circumstances, or lack of knowledge to take financial advantage of another party," Secretary Wiessmann added. "Consumers and businesses cannot afford to take every financial opportunity or transaction at face value. This holiday season, everyone is going to have to be more diligent and investigate before investing their money or sharing personal or financial information."
Anyone can contact the Department of Banking and Securities at 1-800-PA-BANKS or 1-800-600-0007 to ask questions or file complaints about financial transactions, companies, or products. Members of the public are also invited to connect to the department through Facebook and Twitter, or subscribing to the department's newsletter.
MEDIA CONTACT: Ed Novak, 717-783-4721
SOURCE Pennsylvania Department of Banking and Securities