Quick Credit in a Pinch? Don’t Pay Upfront

It’s a hard situation when your credit history isn’t quite up to par and you need cash. The last thing you need is an offer for a way out of the crunch that puts you deeper in the hole. Enter the “advance fee” scheme.

How It Works

• An online ad, a call, or an email offers quick access to a loan or credit card even for people with poor credit.
• The representative sounds friendly, professional, and helpful.
• They explain that the offer comes with an upfront fee to cover processing, insurance, or a pre-payment deposit.
• They may ask for payment of that fee via a wire transfer, payment app, cryptocurrency, or a gift card.

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What You Should Know

• Criminals take advantage of the emotional stress people in this situation are in, and add urgency to get them to accept their offer.
• As soon as they collect the upfront payment, the perpetrator disappears.
• When a payment form is not typical, like a gift card or cryptocurrency, it is a scam.
• Lenders can require an application fee before they consider credit requests, but they can’t condition approval of the loan on payment of an upfront fee.

What You Should Do

• Steer clear of any credit or loan offer that requires an upfront payment.
• Search the lender's name online alongside terms like reviews, complaints, or scam to see what comes up.
• Legitimate organizations exist to help with consumer debt. The nonprofit National Foundation for Credit Counseling is a good place to start.