When You're Down

Remember the old cartoon that showed a mouse caught in a trap and the caption read “When you’re down and out every one wants a piece of you”? Why is it that people seem to come out of the woodwork to take advantage of those of us who are going through difficult times?

Illegal advance fee loan broker scams are back again in Alberta and many of the victims are truckers. The Fair Trading Act passed in September 1999, bans the charging or collecting of an advance fee prior to a loan being delivered to a consumer. Advance Fee Loan brokers should not be confused with mortgage brokers or banks and credit unions. Loan brokers advertise in newspaper classified ads hoping to attract consumers or business owners that are having trouble getting loans with the promise of guaranteed, low interest loans to consolidate debts and clean up credit records.

These brokers promise fast money (loans) with few questions asked – obviously very appealing to anyone reeling from all of the current issues in the marketplace. The customer of course is required to pay an up-front fee before the firm provides any service. The advance fee is generally a fixed dollar amount regardless of the size of the loan and is non-refundable whether the loan is approved or not. Of course, often there is no loan. The victim may have a contract that is full of “legalese” which does not confirm the loan, but rather promises financial consulting and the preparation of a business plan. The materials received by the victim are in fact useless.

Another hot item is people who take money up front to fix your credit rating.

Think about it, this involves changing history which as far I know is pretty tough for us mortals to do. (If anyone out there can figure out a way please let me know because there is a house that I should have bought back in the 70’s that still haunts me. Not to mention a few retro-active bets I’d like to place)

Then there are the companies that advertise “Government Programs that are in place to help you miraculously get rid of your debt” The secretive Government Programs they speak of are contained in the Bankruptcy Act. These companies charge you a fee and then often turn you over to a Bankruptcy Trustee. They tell you that they are working for you and the Trustee is working for your creditors. In actual fact the trustee is a licensed professional whose job is that of a mediator. Trustees often give a free consultation and all their fees are set by the act.

It all comes down to what you’ve been told all your life, if it sounds too good to be true, it probably is.