Be wary of credit and loan scams this holiday season

While economists are reporting signs of improvement in the economy, it’s still tough out there for families trying to make ends meet. The fall and winter months can be even more financially challenging, between balancing the expensive holiday season and needing extra cash for repairs and replacements of everyday objects. This can set many families up to be victims of lending scams.

Scams have been around for a very long time, and they keep changing, creating the need for individuals to be careful about spending and investing money. One common scam is the advance fee scam. Scammers contact victims about obtaining a credit card or much-needed loan, but ask for a pre-payment fee, or advanced fee, in order to obtain the credit card or loan. Once that fee is paid, the scammer disappears, and the victim not only doesn’t receive a credit card or loan check, but is also out the money paid to “set up” the account.

What catches victims off guard is that the websites, documents and emails that accompany these phony offers appear to be legitimate. They might even look like they’re from the official lending institutions. And similar advance fee scams have run with the angle that the victim won something like a lottery or inheritance gift, and has to pay taxes or processing fees before the money can be delivered.

Here are some tips from Western Union to avoid becoming the victim of a scam:

* Never send a money transfer to pay fees up front to obtain a credit card or loan. Walk away from the deal if you’re asked to transfer money to cover things like insurance, processing or paperwork.

* Never send a money transfer to an individual you have not met in person.

* Research the companies who’ve contacted you about setting up a credit card or a loan. Use the Better Business Bureau, the Federal Trade Commission, your state Attorney General’s office or your local police department to find out if there have been complaints made about the company.

* Look for poor grammar including missing words and spelling mistakes on documents. Also review the email address – is it from a generic account anyone can access, or does it appear to be a specific business address?

* Never use or forward money from a deposited check until the check officially clears, which may take weeks. By law, banks must make available to you funds from the check you’ve deposited, even though it could take a couple of weeks to discover a check is fraudulent. If you’ve spent or forwarded that money and the check bounces, the bank will hold you responsible for the total amount of the check.

* If it sounds too good to be true, it probably is. Victims are lured by scams that make big promises of money, or by fraudulent loans and credit offerings that don’t care how bad the victim’s credit score is.

If you are the victim of a scam, contact your local police department to report it. And if you sent a Western Union Money Transfer and think you may be a victim of fraud, contact the Western Union Fraud Hotline Number at 800-448-1492.