Arrow-right Camera


Little Loan Shoppe’s practices raised early red flags with BBB

The BBB is the front line in so many ways. For 100 years, in the spirit of self-regulation, we’ve joined with ethical companies to promote an honest marketplace. Peer pressure in industry is more effective and palatable than even one more government regulation.

But after 25 years in this business, I know when it’s time to call law enforcement. When a company’s actions move from poor practices to outright fraud, we need to get the attention of an agency that can take the legal action a situation requires.

Boy, did that happen with The Little Loan Shoppe, one of the first online payday lenders in our area. At the BBB, the red flags rose early and often.

The alleged Ponzi scheme around this business has attracted a lot of media attention. A bankruptcy court is now going after investors to help pay off some of the debt. And many investors were victimized, just like the payday loan customers The Little Loan Shoppe served.

Often, scams will exhibit a pattern of activity, including:

• Multiple changeable locations, constant mail returns, several mail drop locations, and failure to give a straight answer about where they are headquartered.

• Moving from state to state when things begin to get a little sticky.

• Not giving consistent, truthful answers about ownership or business status.

• Calls from employees concerned about the company’s business practices and reports of bouncing paychecks.

• Lots of BBB complaints, usually about the same problem.

• Vague or phony locations listed on the company website with a picture of a skyscraper, when that address is really attached to a private, rented mailbox.

We saw this template, for the most part, with The Little Loan Shoppe. They bounced from Bountiful, Utah, to Canada to assorted Spokane locales. But the nature of the complaints was most alarming. Individuals who sought out an Internet-based payday loan gave the company their bank account information. Withdrawals were scheduled and authorized. No problem, if you can overlook the 782.14 percent interest rate.

But our plethora of complaints indicated that once the company had that information, withdrawals — of a higher amount than agreed to — occurred repeatedly. Not a good situation for people in such financial straits that they had to seek a payday loan.

At first the company answered BBB complaints, but the underlying cause never went away. Once the U.S. Attorney’s Office got involved, the company quit responding at all. Now, because of the pattern and sheer volume of complaints, this company has an unfavorable record with the BBB dating back to 2007.

I really wonder what kind of due diligence the investors undertook. Had they simply looked at, or contacted the Securities and Exchange Commission, they might have thought twice about that investment. But a friend would not rip you off, right?

Affinity fraud is an awful thing because trust has already been built for the scam artist to take advantage of. Pyramid and Ponzi schemes are most successful when a trusted person leads the victims. In this case it was the Jehovah’s Witnesses community, but we’ve seen it with all sorts of affiliations and groups.

It took the BBB a number of years to get the attention of law enforcement in this case, and I wonder if we could have saved a whole lot of victims if someone had moved faster.

But the real kicker here was a call we got in August of this year. A job seeker let us know one of our state employment offices was listing a work-at-home job opportunity from The Little Loan Shoppe in Bountiful. So are they really out of business? And is anyone screening these job postings?

Remember, the key rule with investment is this: Investigate first. And always Start With Trust by researching a company at

Jan Quintrall is president and CEO of the local Better Business Bureau. She can be reached at

Click here to comment on this story »