The BBB of the Mid-South is warning consumers about another advance fee loan scam operating with a Memphis address. Cardinal Financial Group offers a personal loan with one stipulation – the customer must pay an up-front fee in order to receive the loan.
Cardinal Financial Group lists its business address as 1991 Corporate Ave., Memphis, TN. However, the BBB has verified that no business with that name is a tenant at that address.
Consumers from outside Tennessee have contacted the BBB to inquire about the company; however, they found the offer fishy enough to seek BBB advice before sending any money. To date, no complaints have been received from local consumers victimized by the scam. According to the loan agreement the company sent one consumer, a “collateral payment” of $1200.00 is to be paid in five monthly installments of $240.00 prior to disbursement of any loan funds.
“Charging an upfront fee for a loan is illegal in Tennessee,” said Randy Hutchinson, BBB President. Companies often disguise this charge with deceptive rhetoric. In this case, the company’s loan agreement states, “the collateral payment stated herein does not act as a fee in any way.”
The BBB of the Mid-South often responds to consumer inquiries about similar types of advance fee loan scams and offers the following consumer tips on advance fee loans:
- Don't pay for the promise of a loan. It is illegal for companies doing business by phone in the U.S. to promise you a loan and ask you to pay for it before they deliver.
- Ignore any ad or hang up on any caller that guarantees a loan in exchange for a fee in advance. Remember that legitimate lenders never guarantee or say that you will receive a loan before you apply or before they have checked out your credit status or contacted your references, especially if you have bad credit or no credit record.
- Ask yourself why, if a local financial institution won’t make you a loan, someone in Canada would.
- Don't make a payment to an individual for a loan. No legitimate lending organization would make such a request.
- Don't wire money or send money orders for a loan through wire transfer companies. You have little recourse if there is a problem with such a transaction.
- Check out any lender with your local Better Business Bureau and state department of financial institutions prior to entering into a transaction with them.