OLYMPIA – The Washington State Department of Financial Institutions (DFI) warns consumers to check that any lender they consider doing business with is licensed by Washington State to make consumer or payday loans.
During the holiday season, consumer spending reaches high levels, and shoppers often feel the need to borrow extra money. Unfortunately, advance fee scammers are lying in wait to take advantage of this need.
Advanced fee scammers pose as lenders. They tell you that they can’t fund your loan until you pay an upfront fee. However, you pay the fee and the loan never comes.
The first contact with these scammers comes in many forms. They may contact you by email, text message, or phone. You may even contact them by applying for a loan from an unlicensed company.
Regardless of the first contact, these scammers have one thing in common: They will ask you to pay before they give you the loan. Often they will instruct you to wire money or buy a pre-paid card and call them with the card number. They may even ask you to do this several times, each time with an excuse about why they need more money up front. Common excuses include wire fees, insurance, taxes, collateral, and proof of ability to repay.
“In the past three months we have received complaints against at least a dozen different advance fee scammers,” Consumer Services Division Director Charles Clark said. “Consumers should remember that very few legitimate small loan lenders will ask them to pay an advance fee.”
“DFI’s Division of Consumer Services is committed to ensuring Washington’s lending industry-follows all consumer protection lending laws, and has a heightened focus in the area of personal loans,” said DFI Director Scott Jarvis. “It’s appalling how many individuals continue to take financial advantage of others- especially at this time of the year.”
VERIFY LICENSES
DFI strongly recommends that consumers deal only with those lenders that are properly licensed to conduct business or are exempt from licensing by being a bank or credit union. Consumers can determine whether lenders are properly licensed using the "Verify a License" feature on the DFI’s website at
www.dfi.wa.gov/consumers/findcompany.htm.
REPORT FRAUD
Washington State residents, if you are suspicious of unlicensed activity by a lender, please contact the Department at 1-877-RING-DFI (746-4334), or online at
www.dfi.wa.gov. You can also go to the DFI web site and search for the names of suspected advance fee scammers.
If you feel you have been the victim of a loan scam please contact the Federal Trade Commission at 1-877-FTC-HELP (382-4357) or online at
www.ftc.gov; or contact the Consumer Financial Protection Bureau (855) 411-CFPB (2372) or online at
www.consumerfinance.gov. If victims believe the scammers have access to bank account information and social security numbers, they should consider themselves victims of identity theft and take appropriate precautions. The Federal Trade Commission has information for victims of identity theft available online at
www.ftc.gov.
If you feel you have been the victim of a loan scam involving the Internet please contact the Internet Crime Complaint Center online at
www.ic3.gov.
If you feel you have been the victim of a loan scam and are concerned about your personal financial information, contact your banking institution, and the three major credit bureaus.
About DFI
www.dfi.wa.gov ▪ 360-902-8700 ▪ 877-746-4334
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: http://www.twitter.com/FinEd4All, www.twitter.com/DFIConsumers, www.finlit.blogspot.com, www.youtube.com/user/WADFI, www.homeownership.wa.gov.
About Division of Consumer Services
www.dfi.wa.gov/cs ▪ 360-902-8703
The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as "payday lenders." The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.
