Scam Watch
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The pitch: Bad credit? No problem!
The scam: The Federal Trade Commission said any statement by a lender professing not to care about your credit history should raise a major red flag. It’s often a prelude to a scam that calls on the consumer to pay a fee before getting a “guaranteed” cash loan or credit card. Then the loan or credit card arrives and it’s not as originally described.
The settlement: The agency announced last week a settlement with Financial Advisors & Associates, a Florida-based company that allegedly offered traditional credit cards for a fee, usually at the rate of 10% of the “credit line.” But when the card arrived, the agency alleged, it could be used only to buy items in a company catalog. Financial Advisors did not admit wrongdoing as part of the settlement but agreed to pay nearly $1 million from its liquid assets and the sale of an SL 500 Mercedes convertible. The agency said the money would be used for consumer redress.
The advice: “If you’re asked to pay a fee for the promise of a loan or credit card, you can count on the fact that you’re dealing with a scam artist,” the commission says in its consumer site on advance-fee loans.
Info: www.ftc.gov/bcp/edu/pubs/consumer/telemarketing/tel16.shtm
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