Advance-fee loan sharks are preying on unwary consumers, taking their money for the promise of a loan or credit, and leaving them even more troubles. The scam artists often pretend to be legitimate lenders to entice consumers into falling for their very appealing but bogus offer.

According to law enforcement agencies ads for advance-fee loans guarantee that your loan will be approved, regardless of the applicant’s credit history. But to take advantage of the offer, the consumer has to pay an upfront fee. The catch? The scam artist takes off with your money, and the loan never materializes.

Advance-fee loan scams are especially appalling because they prey on the most vulnerable consumers who are in need of credit or a loan. In this scam, con artists lure the victims with ads on the Internet, television or newspapers, promising loans for people with bad or no credit. They use legitimate-sounding company names and offer credit cards, loans or debt relief, but at a price anywhere from $50 to several hundreds of dollars. Victims are told they are paying for processing fees or credit checks.

Legitimate offers of credit do not require an up-front payment. The law prohibits charging people in advance prior to providing a credit card. Although legitimate lenders may charge application, appraisal, or credit report fees, the fees generally are taken from the amount borrowed. And the fees usually are paid to the lender or broker after the loan is approved. Legitimate lenders may guarantee firm offers of credit to “credit-worthy” consumers, but first, they evaluate the consumer’s creditworthiness and confirm the information in the application. No legitimate company should ask for any fees to process your request for a loan until the loan is approved and funded.

You can avoid being taken by advance-fee loan sharks by following those simple steps:

Finding Low-Cost and Legitimate Help for Credit Problems

It’s a good idea to try to solve your debt problems with your creditors as soon as you realize you won’t be able to make your payments. If you can’t resolve your credit problems yourself or need additional help, you may want to contact a credit counseling service. There are non-profit organizations in every state and your area that counsel and educate individuals and families on debt problems, budgeting and using credit wisely. There is little or no cost for these services. Do not hesitate to contact friends, government entities, local authorities and ask questions before you make any decision when it comes to credit repair or getting a loan.