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Michigan Warns of Advance Fee Loan Scams

Beware of Loan Offers Involving Wire Transfers

July 15, 2006
Michigan Attorney General Mike Cox is warning consumers that advance-fee loan crooks are using false Michigan business addresses and targeting people with debt problems through websites.

Cox highlighted recent complaints regarding the Royal Oak Financial Group and SouthField Financial Group, both of whom falsely claim to be headquartered in Michigan.

"Consumers should completely avoid any lender that requires up-front payment to guarantee a loan, followed by payment by wire transfer," said Cox. "Consumers have little recourse if there's a problem with a wire transaction. Moreover, legitimate lenders don't pressure customers to wire funds."

Recent complaints and calls received by Cox's office evidence consumers who wired hundreds of dollars in up-front fees to secure personal loans but then failed to receive either the loan proceeds or payment refunds.

After applying for a loan online through the website of Royal Oak Financial Group, consumers were directed to pay upfront for insurance by wire transfer to Canada and directed to a named individual, rather than the company name.

While the Royal Oak Financial Group purports to be located at 1441 East Maple Road, Suite #103, Troy, Michigan, postal authorities report that Royal Oak Financial Group mail sent to that address is not being recognized by the postal service and is, therefore, being returned as undeliverable.

Royal Oak Financial Group is not a licensed mortgage lender by the Michigan Office of Financial and Insurance Services, even though the company's website offers mortgage loans.

Postal authorities likewise report mail sent to SouthField Financial Group at 2700 Civic Center Drive, Southfield, MI, is not being recognized by the postal service.

The SouthField Financial Group website also offers personal loans, and includes a testimonial from "Jason D." of "Flynt, MI."

Cox added, "The problem of advance-fee loan scams is substantial, and a recent upsurge in inquiries and complaints from consumers both in Michigan and out of state suggests that the use of the Internet to commit this type of fraud is on the rise."

Complaints received involving out-of-state victims who remitted payment to Canada are being shared with the Federal Trade Commission and Project Phonebusters in Canada.

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