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SPARTANBURG, S.C. , erica, a national provider of small-dollar loans and other financial services, has recently become aware of a scam targeting consumers in North Carolina . Reports indicate scammers, posing as Advance America representatives, are contacting local residents offering online personal loans, but once they file the necessary documents with their personal information, they are told to transfer money to qualify. These scam artists are in no way affiliated with the company. In fact, due to current state regulations, Advance America does not operate in North Carolina .
Scams like this typically take the form of contacting residents claiming that they have been pre-approved for a loan, and then asking them to purchase a prepaid debit card or wire money as a “processing fee” or “good faith deposit.” In other cases, scammers seek to collect on “unpaid” small-dollar loan debt, often threatening arrest or legal action or demanding personal financial information over the phone.
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Consumer Alert: Scammers Claiming to Represent Advance America Target North Carolina Consumers
“Scammers often use the reputation of a legitimate, respected business to con victims out of their money,” said Patrick O’Sherica. “Legitimate short-term lenders such as Advance America are highly regulated at both the state and federal level and will never use the kind of fraudulent and illegal tactics employed by scam artists.”
Advance America urges consumers to identify the warning signs of financial fraud and follow these tips for avoiding small-dollar loan and debt collection scams. If individuals suspect being scammed, they should report it immediately to local law enforcement and to the lender that the scammer claims to represent. Advance America customers can call 888-310-4238.
Federal law strictly regulates how real bill collectors and loan agents can do business. The federal Fair Debt Collection Practices Act (FDCPA) specifically prohibits debt collectors from being abusive, unfair or deceptive in trying to collect a debt. The law specifically says debt collectors cannot threaten consumers with arrest or jail time if they don’t pay their bill. If someone claims you will face criminal prosecution unless you immediately wire them money, it’s almost certainly a scam.
Scammers may also claim that you have been pre-approved for a loan, and then require you to purchase a prepaid debit card or wire money as a “processing fee” or “good faith deposit.” Others may really be identity thieves out to get your personal or financial information.
In addition to understanding how lenders and bill collectors can operate, consumers should also take steps to protect themselves, including:
- Never give personal information such as your Social Security number or bank account information online or over the phone without verifying that you are working with a legitimate lender or bill collector. Verify company licenses when applying for a loan online. Legitimate lenders will display their licenses on their websites to verify they are fully licensed in your state and comply with state and federal laws.
- Be suspicious of any email with urgent requests for personal financial information. If an email makes upsetting or exciting false statements, it’s likely a scam.
- Never wire money or provide prepaid debit card information to a lender claiming you have been pre-approved for a loan and must make an initial payment as a “show of good faith.” Legitimate lenders do not offer approvals prior to application and do not require good faith deposits.
- Keep anti-virus, anti-malware, and spam email protection software up to date on all your computing devices.
- Maintain a record of all outstanding debt, and include lender contact information.
- Regularly check your bank, credit and debit card statements to ensure there are no unauthorized transactions. Likewise, check your credit report (using Equifax, Experian, or TransUnion) every four months on a rotating basis; credit reports are often one of the first places where signs of identity theft or fraud will appear.
- If someone approaches you claiming you owe them a debt, demand they provide written proof of the debt as the law requires – especially if it’s for a charge you don’t recognize.