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In these scams, the businesses targeted are those which have problems obtaining loans or lines of credit from normal sources, such as financial institutes. In these schemes, the fraudster offers a "guaranteed" loan for a fee paid in advance and alleges that the loan will be obtained from a legitimate lending institute because of special contacts with such institutions.
Once this fee is paid, however, the fraudster simply retains, vanishes and no loan is made available.
Often these scam artists require a percentage of the desired loan as their fee. For instance, they may ask for 5% or even 10% so if the victim is attempting to obtain a $100,000 loan, this advance fee would be $5,000 or $10,000.
At Loss Prevention Concepts, Ltd. we recommend that businesses regard all advance fee propositions as probable fraud schemes, and at the least, have such propositions checked out by a competent attorney If businesses have been unable to obtain a loan from a legitimate lending institution, it is extremely unlikely third parties acting on your behalf would have any better luck.
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