BALTIMORE (WMAR) — The pandemic and inflation are a few reasons why consumers are seeking personal loans. But instead of getting the help they’re seeking, advanced fee loan scams are costing consumers money.
Lenora Alston needed help with housing.
“I was on a waitlist for a place to move, so I was staying at a hotel,” Alston said.
Alston was running out of money and time, so she searched for a personal loan to temporarily hold her over.
“I got a text message from this company called KwikLoans stating I was approved for a loan,” said Alston.
A company representative said they had to improve her credit first. They would do that by making deposits into her account and she would send the money back on gift cards.
Alston sent over a thousand dollars in gift cards but still hadn’t received the loan.
“I’m at the store and I get the last card and I send them the money back and when I did that I went to go back and check my account and I was locked out of my account. I couldn't do anything. They shut it down and the fraud department sent me a text,” said Alston.
Her bank intervened by flagging the suspicious transactions and freezing her account.
“I don't know why I wasn't smart enough to think, you know, why do I keep sending money back and not getting anything?” Alston said.
Angie Barnett, president and CEO of the Better Business Bureau serving greater Maryland, said these advanced fee loan scams can be devastating.
“They give you a plausible reason why you might pay a small fee then they come back to you and say, you know, my supervisor red-flagged your loan, we need additional collateral,” said Barnett. “We have instances reported to us where people have paid almost as much as the loan value was.”
Reporter Mallory Sofastaii tried calling the four numbers listed on KwikLoan's website, most didn’t work. Neither did their contact form.
The business isn’t licensed in New York, the business address is a residential home, and the FAQ includes a link to a different site, which belongs to a registered lender in California with a very similar name.
KwikCash said their website was replicated, they’re not at all affiliated with KwikLoan and they’ve reported the site to the Federal Trade Commission.
“I just needed some type of funds to get me out of the situation I was in, but it kind of screwed me over and put me in a deeper hole actually,” said Alston.
Alston didn’t lose any money thanks to her bank's fraud department, but she did temporarily lose access to money in her account and her personal information was compromised.
She's now warning anyone seeking a personal loan to research the lender, check that they’re registered in the state they’re headquartered, and no lender will request fees before delivering the loan or guarantee you a loan.