moneySo you're broke, have really lousy credit, and need some cash, but don't worry -- there's a company out there that will give you a loan anyway. It doesn't mind that your credit is bad. In fact, its program is designed for people like you. So don't worry. You've found Financial Sanctuary, at long last.

If that's ever the situation you find yourself in -- broke and desperate to pay off some bills but in discussions with a company that can offer you a loan without a credit check -- you're probably falling for the ol' advance fee loan scam.

I spoke to Alison Southwick at the Better Business Bureau earlier this week about online payday lending, and the conversation somehow eventually turned to advance fee scams.








I hadn't a clue what Southwick meant until she started explaining them. Then I realized that I knew what she was talking about -- I just hadn't heard the term -- and, yes, I realize that hopefully most people are too smart to fall for this.

But con artists go after vulnerable people, and even the smartest, shrewdest people can be vulnerable. And chances are, we're going to see more advance fee loan services as the year goes on, not less. So it seems like a friendly reminder is never a bad thing.

Besides, we have names. Southwick gave me some of the names of some Web sites that have received a ton of complaints from consumers, who reported them to the Better Business Bureau. Now, maybe these companies are actually as good as gold and honest as the day is long, but they certainly don't have a stamp of approval from the BBB:

In any case, Southwick says that when it comes to a company involved in an advance fee scam, they are all probably the same thing:

"Some guy in Canada -- no offense to Canadians, but they often seem to come out of Canada -- sets up a Web site, and it looks like a legitimate bank or a financial servies company, and they tell you that it doesn't matter if you have no credit, low credit, bad credit, it's no problem, we'll get you a loan, sure enough."

Everything sounds great, says Southwick, until they say, "You have to pay just a few hundred dollars upfront."

It sounds incredible that anyone would fall for that, but it's easy to understand how some people do. If you're truly desperate and worried about the lights being turned off, or your car being repossessed, you may well decide that it's reasonable to part with $300 upfront to get a loan for $6,000. Besides, you'll probably reason, "I'm getting a loan, there are going to be fees attached." And, of course there are -- but not before getting your money.

It's probably also hard to believe that the person you're dealing with, those smiling professionally dressed people Photoshopped into the Web site you've visited, could actually be dishonest. But in fact, not only are consumers falling for these scams, so are some small businesses.

The FTC says that in the last year complaints over advance fee scams have gone up from 1 percent of the overall complaints they receive to three percent.

And so people send in their advance fee, anxiously waiting to get their loan.

But, "of course," says Southwick, "you're just sending your money to some guy sitting in a basement in a foreign country. It's an old scam, but people continue to fall for it over and over again."

Geoff Williams is a regular contributor at WalletPop. He is also the co-author of the new book "Living Well with Bad Credit."

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