Loan scammers prosper amid crisis

You could hear in his voice that the last straw was on that famous camel’s back.

“I was out of work for a while, and lost my health insurance. My son got sick and now we owe the doctors and hospitals so much money! To make it worse, we had to tap into our cash reserves and even our credit card advances just to put food on the table. Now I am back at work, insured, but we’re still in a big hole. The bank will not loan me any money!”

So, when this desperate person saw an ad in the company newsletter for Morgan Financial, he thought there was hope yet. When contacted, Morgan said it would gladly offer him a loan to get caught up and pay off the credit card. All the company needed was a security deposit of the first few payments, and the funds would be wired into his account. He couldn’t wait to tell his wife, so decided he would just surprise her when the money was in the bank.

At the time, this consumer was short on cash, so had no choice but to use the rent money to “secure” the loan. He did what was required and sent $1,300 via Western Union. Ten days passed, and no money. That was when a sinking feeling came over the man that perhaps he had been ripped off. What would he tell his wife?

Repeated attempts by the Better Business Bureau to contact Morgan Financial have been unsuccessful and law enforcement is involved.

Advance fee loan scams are all too common these days. The BBB takes calls like this one regularly, the continuous warnings go out, yet it never gets any easier to tell a victim they’ve been scammed. Despite the illegal nature of such offers, more people seem to continue falling for this offer of false hope.

People, especially the victims, think it’s easy to catch such thieves, yet the truth of the matter is, catching these scammers is incredibly difficult. Why? They are fluid, using drop boxes (and stolen credit cards to set up those boxes), disposable cell phones, and then relocate as soon as things get the least bit risky. Wired money can be picked up anywhere in the world, and most activity is taking place outside of the U.S. Chasing ghosts at best.

There are a few alarming dynamics to some loan scams:

“ Advertising in a company newsletter lends legitimacy to such offers, as employees often believe some sort of screening has taken place to protect them

“ Use of sophisticated “fake” Web sites to promote the product has increased, so no longer are these scammers using only classified ads to tempt people

“ Stealing the identity of real, operating loan companies as a front is causing people to drop their guard

“ Moving from Western Union to asking the victim to simply make a deposit into a specific account at a major bank also lends legitimacy

“ Some misuse the BBB torch symbol and claim BBB accreditation in print and/or on fake Web sites when they make a phone pitch

One such group using a variety of the above-stated tactics is C.S.I., aka Cornerstone Investments, which is currently using a legitimate company in Wenatchee, Cornerstone Lending, as a front to purport such a scam. The scammers are merely telling people this is who they are, so if someone checks, they find a long-time, legitimate firm is operating in that city at that address.

The scam takes on greater proportions when victims begin calling the real company after the scammer has ripped them off. They can’t find the scammer, but the honest, legitimate lender in Wenatchee then gets an earful, and costs the company an incredible amount of precious time!

Factor in the adverse effect that calls like this have on the BBB staffer handling these types of complaints. It is never easy to let someone know they have been victimized, that their money is gone, and they won’t see it come back. The victim is already in a desperate financial situation. It is unfortunate that we talk to more victims than we do those who checked first and did not wire money.

As with Morgan Financial, the BBB also has been unsuccessful in contacting C.S.I., aka Cornerstone Investments. Law enforcement is involved in this case as well.

Last week, however, we received a call from a woman on the east coast who put her Sherlock Holmes hat on and collected all sorts of information on the scammers who were using Cornerstone’s good name. She revealed that she pulled up their BBB Reliability Report and did not see any accreditation, to which the scammers replied, “We’re the good guys in Wenatchee.”

She then pulled that reliability report up at www.bbb.org and there she saw the BBB report that warned people about the advance fee scammers using the name. She was just about ready to make a $2,400 deposit into one of the accounts they had set up, but did not because of her due diligence in checking first.

This smart consumer took the time to call us with her additional information, and thanked us for having it available.

Saving one person from being victimized made our day. While we know over 30,000 people check reports in our area every month alone, it sure it nice to hear a bit of praise, as well as triumph, over the phone.