Advance fee loans scams have been with us for a long time and only seem to have increased as people became more desperate in regard to their finances.  Generally, the way advance fee loan scams work is that you see an ad or find an online loan company that promises to loan you money, but requires upfront money for various costs.  Then the company never comes through with the loan and you are out the money.  Among the phony loan companies now are American Commercial Finance, First Star Eastern Lending and Financial Services Unlimited, Inc..  The new twist on the old scam is that the lenders require insurance for the loans prior to making the loans and they require that the insurance be paid for by loading cash on to a Green Dot MoneyPak card and then have you send the card to the scammer lender with the access codes for the card.  Generally the amount on the card ranged from $600 to $3,000.  Green Dot MoneyPak cards, like wired money through Western Union, is very difficult to trace leaving the victim without recourse.

TIPS

Don’t pay an advance payment for a loan.  Legitimate lenders do not require them.  Never borrow from an online company unless you have checked whether the company is legitimate with the Better Business Bureau, your local state Attorney General and your state’s banking commissioner.  You also may want to Google the name of the lender with the word “scam” and see what comes up.