Advance fee and broker fee scams
Advance fee scams, a type of consumer fraud, are becoming increasingly common. Scammers ask for money up front, in exchange for the “promise” of a loan that they never deliver. At Lending Club, we never ask you to pay ANY fees up front before you receive your loan. And no loan broker or other service is authorized to charge a fee on our behalf.
Advance fee scammers often target people with poor credit who have recently been declined for a loan, and offer them a large loan at a low rate. Here's how these scams work:
- You receive a call or email from a company that you have never contacted, offering you a loan with attractive terms. The person contacting you may say they're from a major financial services company, such as Lending Club.
- To obtain the loan, they instruct you to purchase a prepaid debit card (frequently a Green Dot® prepaid card or Vanilla Visa® gift card) for several hundred dollars, which they claim will be used to deposit your loan.
- They will then ask you for the card number to verify the account and transfer the loan funds to you. But they never have any intention of providing you with a loan. Instead, they use the card number to withdraw the funds you have deposited on the card.
- In some cases, they will also request additional fees to resolve alleged problems they have encountered with your social security number, credit report or outstanding issues with the I.R.S.
Remember, if a loan offer comes out of the blue and seems too good to be true, it probably is.
The good news is that you can protect yourself against an advance fee scam by knowing what to look for and taking simple precautions.
- Don't pay money for the “promise” of a loan. Ignore any advertisement or hang up on any cold caller who “guarantees” a loan in exchange for a fee paid in advance.
- Be aware that Lending Club does not work with loan brokers. Anyone who wants to charge you a broker fee to facilitate a loan through Lending Club is likely to be a scammer.
- Remember that it is very uncommon for a lender to guarantee that you will receive a loan before you apply, especially if you have bad credit or no credit history at all. Lenders will almost always check your credit status before offering you a loan.
- Beware of anyone who pressures you to “act immediately” by sending money or personal information.
- Never send money, whether by prepaid debit card, wire or money order, before you receive the actual proceeds of the loan. Most lenders won't ask you to send funds in advance, and you will have little to no protection if you do.
- Always make sure you are dealing with a reputable company before you give out sensitive financial information. If you have any suspicions, get the company's contact information directly from their website and call them to make sure you're dealing with the company you think you're dealing with. You can also check their website for information about common scams. In the past, some scammers have pretended to be the Better Business Bureau or another legitimate organization.
If you are a victim of an advance fee scam
If you believe you're a victim of an advance fee scam by someone pretending to be a Lending Club employee, take the following steps immediately:
- Do NOT provide account information for a prepaid debit card to an unknown caller. Lending Club will never request this information from you.
- Call Member Support immediately at 888-596-3157. We can verify the identity of Lending Club employees.
- File a complaint for internet-related fraud with the Internet Crime Complaint Center.
- Report the scam to your state's Attorney General.