FBI Issues Tips on How to Avoid Becoming a Victim

In an article titled Credit Crunch Fuels Rise in 'Advance Fee' Schemes, published in the Wall Street Journal on July 1, 2008, it is reported that Federal regulators including the Federal Deposit Insurance Corp., the Department of Justice and State Attorney Generals are warning that con artists are using the credit crisis to take advantage of people looking for loans.

According, to the article, “some companies are targeting upper middle class folks and small businesses “who just couldn’t quite get” funding from conventional banks but who do have some cash.” The company promises to secure the loan, collects the advance fee and the funding never comes.

The Federal Bureau of Investigation was quoted in the article as saying that it had recently received several hundred complaints about advance fee loan schemes. It has posted an alert on its web site about this with some tips on how to avoid becoming a victim. http://www.fbi.gov/scams-safety/fraud/fraud

Among the suggestions in the Government’s fraud alert to borrowers: exercise due diligence, be suspicious of non-disclosure and confidentiality agreements, and involve a competent attorney in the review of complex agreements or documents.

If you have any questions or comments about this post, or are a business owner or developer who had a similar experience, please contact attorney Jonathan Scott at jcscott@scottandscottllp.com.