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Business - Scam Alert

Sunday, Nov. 08, 2009

Scam Alert: 'Loans,' cards will cost you

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• THE SCAM: Advance-fee loans

• HOW IT WORKS: You may be tempted by ads and Web sites that guarantee loans or credit cards regardless of your credit history. The catch comes when you apply for one or the other only to discover you have to pay a fee in advance. The Federal Trade Commission warns that such advance-fee loans are usually scams that put money into con artists' pockets and fail to deliver on their promises. Victims often are stuck with a worthless application or a stored-value or debit card they don't want.

• WHAT'S AT STAKE: The money you pay in advance and any personal information put on an application.

• HOW TO BEAT IT: The FTC says recognizing red flags is your best defense: Don't buy their pitches if they aren't interested in your credit history, hit you with undisclosed fees, conduct business strictly over the phone, use business names similar to trusted organizations or aren't registered as lenders in California.

For a look at past scams, go to www.modbee.com/business/scam.