The Better Business Bureau is warning consumers about a scam costing Texans tens of thousands of dollars.
For the scheme, known as an advance fee loan scam, the scammers offer to lend money in exchange for an up front fee. Lynda Burnside, who was staying in Lorena when she fell for the scam, said a scammer used Facebook to offer her $100,000 if she sent $2,000 via money order.
Burnside went to Walmart and wired the money through MoneyGram. The receiver was someone located in Punta Gorda, Florida. But, the scammer was not done yet, coaxing Burnside into trying to send another $2,000 through Bank of America, which grew suspicious and declined to process the transaction -- tipping Burnside off to the scam.
"It was the worst mistake," said Burnside, who planned to use the money to pay for her grandchildren's education. "My kids were so upset with me."
MoneyGram ultimately refunded the entire $2,000 to Burnside in cash. But, she realizes she was lucky to get any of her money back at all.
The local branch of the Better Business Bureau has received 26 reports of advance fee loan scams -- which cost area residents $23,000 -- in the past 12 months alone. And, there are likely other cases that were not reported. Statewide, the BBB heard about 70 reports of the scam and $43,000 in losses this past year. That means nearly half of the money scammers are siphoning from victims was reported stolen in our area.
"It's illegal. You should not have to pay anything up front. And so, that should be the red flag that everybody should be aware of," BBB Regional Director Adam Price said.
Bottom line: never pay money for a loan up front, and never agree to do a loan with a lender who does not make you fill out an application in advance. You should always seek out a reputable bank in person when searching for a loan.
If you feel you've been the victim of one of these scams, please contact your local law enforcement agency or tell the Better Business Bureau here.