Lending Club Blog

Avoid Lending Scams

I recently received an email from a lady in the Midwest who was the victim of an online lending scam. She found my blog about P2P lending and wanted to know if P2P lending was a scam or if she could use it to lift her out of her financial troubles. With her permission I’m sharing an excerpt from her letter:

    “…my husband and I have not had very good financial luck in the past 3 – 4 years.
    We are interested in borrowing money; however, anytime we have tried to borrow money, our credit rating holds us back. We have been scammed out of over $2,000.00 in funding costs by prospective lenders, and we really do not have any extra money to lose.
    If we need to borrow money, but do not want to give out our private information for fear of being scammed again, how could we know if we could qualify…
    We have fallen behind on several bills, paid several others, but really need about $20,000.00 to just take care of all the creditors we have in one consolidated loan. We want to build our credit so we can get back into a house to make it a home for our family.
    Please let me know if there is a way to apply for a loan without giving up our checking information and any ‘up front fees’ before we find out if we could possibly qualify.”

Peer to peer lending is a perfect option for her and others in her situation — particularly because there are no hidden charges, and fees are only charged as a result of an accepted and approved loan. Unfortunately, however, loan scams are quite common and can make people reluctant to seek loans online. In her words, here is what happened in this lending scam:

    “I found a company online…they were out of Portland, Oregon. I spoke with 3 or 4 gentlemen (of which I did keep names and numbers) — they told me what information they needed and promised me that after they sent the legal forms, I signed and returned them, they would wire transfer the $25,000 into my account the next day.
    …they called me later after I faxed the papers and said everything was a go, and gave me the information to Western Union the money. I got all the money together and sent $1,785.00 to the guy in Canada, plus another $125.00 in WU costs, and then called to let them know the money had been sent.
    I waited until the next day to see if the money was in my account and nothing showed up. I called and got the man’s answering machine, but no return phone call. I called the next day and the number had been disconnected. I called WU and told them I thought I had been scammed and faxed all the paperwork to them. It was a very difficult lesson to learn, so now I am paying the price every week to payday and title loans.”

You should never pay an advance fee to secure a loan. Legitimate loans, like loans obtained through Lending Club, do not require an up-front payment. Here are tips from the Federal Trade Commission on how to avoid lending scams:

    • Don’t pay for the promise of a loan. It’s illegal for companies doing business by phone in the U.S. to promise you a loan and ask you to pay for it before they deliver. Requiring advance fees for loans also is illegal in Canada
    • Ignore any ad — or hang up on any caller — that guarantees a loan in exchange for a fee in advance
    • Remember that legitimate lenders never guarantee or say that you will receive a loan before you apply, or before they have checked out your credit status or contacted your references, especially if you have bad credit or no credit record
    • Don’t give your credit card, bank account, or Social Security number on the telephone, by fax, or via the Internet unless you are familiar with the company and know why the information is necessary
    • Don’t make a payment to an individual for a loan; no legitimate lending organization would make such a request
    • Don’t wire money or send money orders for a loan through Western Union or similar companies. You have little recourse if there’s a problem with a wire transaction. Legitimate lenders don’t pressure you to wire funds

    • If you are not absolutely sure who you are dealing with, get the company’s number in the phone book or from directory assistance, and call it to make sure you’re dealing with the company you think you are. Some scam artists have pretended to be the Better Business Bureau or another legitimate organization

    • Check out questionable ads by calling Project Phonebusters in Canada toll-free at 1-888-495-8501. If you live in the U.S. and think you’ve been a victim of an advance-fee loan scam, report it to the FTC online at www.ftc.gov or by phone, toll-free, at 1-877-FTC-HELP (1-877-382-4357)

I can empathize with this lady who was scammed. I consider myself to be pretty financially savvy but I was also scammed out of several hundred dollars in a different situation years ago. Scams work because people generally trust each other and want to believe that they can make money quick or get out of the troublesome financial situation they are in. We here at Lending Club remind you that the best defense against these lending scams is to spread the word. Please pass this post on to anyone that may benefit.

Monday, November 26th, 2007 at 12:07 pm

Comments (38)

  1. Sherry:

    Hello, I signed up for a loan on the internet “Ridge Lending
    Group”. They contacted me by phone that I was approved for a
    60,000.00 Loan @ 7% interest. The man gave me the web address and
    the phone number. I checked both out. The man said I had to put up
    $3300.00 as a collateral payment. I asked why the fees could not be
    deducted from the loan amount. He said they could not secure their
    own money! My brain said this is just another scam.

    April 22nd, 2008 at 10:34 am

  2. Sherry:

    Please warn others so that they are not mislead. I
    have already been scammed, so warning bells went off for me. They
    even faxed me my contract. Everything looks all above board so
    people could easily be taken advantage of.

    April 22nd, 2008 at 10:39 am

  3. Please steer clear of High Pointe Lending Group too. They just got
    me for $800!!! I’m a single parent and did not pay any of my
    bills..I may lose my place…

    May 3rd, 2008 at 10:57 am

  4. this site is a scam site as
    well. They want 1215$ up front for a 10000$ loan. I asked who was
    the lender and the guy said it was confidential and all this crap.
    I “Googled” in the address he gave with the contract which I’ve
    since trashed, and 10 other weird businesses came up at the same
    location but there’s didn’t… So beware of these crooks.

    May 6th, 2008 at 7:42 am

  5. Brenda:

    I too was about to be scammed from aman lous.org.loanfirm he was
    gonna give me a loan for 15,000.00 dollars but he wanted 785
    dollars up front i did not send him any money and stopped
    corresponding with him about it

    May 24th, 2008 at 1:50 pm

  6. Dishon:

    I was scammed out of $1300 by Premier Lending Services. They have
    an address of 600 Vine Street, Suite 2606, Cincinnati ,OH 45202
    1-877-289-3434. Names: Jim Baker, Jenna, Patrick, Roger…
    Watch Out!!!!

    June 13th, 2008 at 10:12 am

  7. jason:

    These people
    took me and my wife for 1000 dollars. They faxed us documents, we
    faxed every bit of personal info… Beware of Bedford
    Lending Group.

    June 23rd, 2008 at 6:08 pm

  8. lisa:

    there’s this lender asking me for an insurance deposit of $795 for
    a $5,000.00 loan. he says once i send the money in I will receive
    my $5,000.00. does this sound familiar to anyone? they are called
    coach financial services. anyone ever heard of them as well?

    July 21st, 2008 at 2:07 pm

  9. Michelle:

    Avoid Cedarbrook Lending Group – they are not honest. Offered me a
    chance to get back on my feet, time sensitive offer for a $20,000
    loan a great rate. My credit was not the best. They needed 6
    payments ahead of time to supposedly secure the loan ($2425.00). I
    paid and have been waiting for three weeks now for the money they
    promised to be deposited in my acct. I have contacted them and all
    they do is redirect me to someone else and then I get a voice mail.
    Every time I recall – I am starting over. No one seems to
    understand my dilemma.

    October 24th, 2008 at 5:47 am

  10. ron:

    same here with CEDARBROOK only I don’t have 2145.00 to send the for
    a 15,000 loan . They tell you that you are approved so naturally
    you are excited and want to send them the money in order to get
    your 15-20,000 consolidatin loan . All these companies are
    preditory scam artists. Call them and say you are calling from the
    FBI and see how fast they hang up to clear out their desks and run
    .

    October 29th, 2008 at 2:51 pm

  11. julie:

    I just faxed over my paper work to Cedar Brook lending and was
    going to pay them the prepayment next week! Thank you for your
    posts, you’ve saved me the $1500.00 I was going to send them for a
    15k loan. We have to stop them! Their website is no longer up
    either! Michelle, Please let me know how your situation works out
    for you, did you wire your money or mail it?

    October 30th, 2008 at 7:20 am

  12. Billie Emerson:

    I, unfortunately, fell victim to Cedarbrook Lending Group. I was in
    desperate need for a debt consolidation loan. I applied for $5000
    to clear up my credit card debt. I was contacted by “David Baxter”
    and was told my loan was approved but the “broker” needed the 1st 6
    months of payments ($910) secured first due to the fact I had a
    prior bankruptcy. I sent the money via MoneyGram to “Michelle
    Neely” in NB Canada. The money was to be deposited into my acct Nov
    3. Welp… it’s Nov 3 and at 2:30pm I was contacted and told the
    “broker” reassessed my credit and in now requiring and additional 6
    months of payments to process my loan. I asked for a refund and
    they said they couldn’t give that to me until Nov 24th on their
    next billing cycle. I had spent my rent payment on the down
    payment. I have $25 in my account and 2 small children. I borrowed
    the other $910 from my grandmother with every hope in the world
    that this goes through because if it didnt, I am going to be
    evicted from my apartment. They promised me it would be in my
    account by 3pm tomorrow. Hopefully it is. If not, I’m out $1820.
    Also I will get evicted, car ins canceled, phone shut off, and the
    hope of my children finally having a good Christmas will be
    shattered.

    November 3rd, 2008 at 6:36 pm

  13. cristy:

    Cedar Brook lending is a scam… I sent them the deposit and then
    they called the next day and said they had to re-assess it and they
    will need another $820 before I receive the loan. I am out
    of $820
    , and that was my rent money… now i will wait two
    weeks to pay rent and it’s late!

    November 4th, 2008 at 9:26 am

  14. cristy:

    I am so upset with CB, I don’t know what to do…. Can I sue? How
    do I get my money back? Do I go to the police? They have a website
    and make is sound so good.

    November 4th, 2008 at 9:28 am

  15. kacie:

    I was also a victim of Cedar Brook. I put my entire rent payment
    and car payment and with wire fees sent 990 to “secure” my 5000
    loan and after i was told i needed to secure the next 8 months for
    another total 990. I am out my rent and my car, my children have no
    food and I was told they would refund my payment and I would have
    it by the next billing cycle..December 3rd. All I wanted was to get
    my car fixed and get caught up on bills. “Mr Henry Wilson” wished
    he could help me and Mr Stanley Danton” was a complete jerk. He
    felt sympathy for me but didn’t know why it was so hard for me to
    “understand” and all the other lenders do it this way too.

    November 4th, 2008 at 2:23 pm

  16. Sinn:

    Can someone here please email me regarding this group? I’m looking
    for more information. stvrsk@gmail

    November 4th, 2008 at 6:09 pm

  17. Billie Emerson:

    Cristy, there is no one to sue. The company is ficticious. I
    researched the company and the address they claim to be located at.
    I called the landlord of the office building (InRel Mngmt) and they
    said the company, “Harvey Garison” the CEO, David Baxter, Stanley
    Denton, and Richard Blake have never been heard of and that UPS,
    FEDEX, and USPS have been there numerous times trying to deliver
    mail from other people who fell victem from this scam. I spoke with
    the 9 attorneys on the 6th floor and none of them heard of them
    either. This is why we had to wire the money to Canada. The money
    cant be traced because it was sent via a personal MoneyGram to a
    “peson” in Canada. If it were sent to a business, it couldve been
    traced. Im out $1848.92. We could very well have some fun with it
    though. I have every person I know calling them and telling them
    what scumbag, lying, pieces of s*** they really are. Cedarcrook
    Lending 866-786-4959 David Baxter x592 Richard Blake x173 Stanley
    Denton x0 (customer service) Your not getting your money back so
    atleast take the time to get your frustrations out on the dirty
    theives.

    November 5th, 2008 at 8:23 am

  18. Billie Emerson:

    Contact the following agencies and file complaints. The more they
    receive, the better the chances are of this “company” getting
    investigated, found, and prosecuted. All of the following agencies
    can be reached via the internet. BBB FTC FL State Attorney Generals
    Office Citizens Services of Florida Division of Consumer Services
    (FL) Office of Financial Regulation (FL) FL Dept of Financial
    Services Also take everything you have to your local police and
    file a police report. They cant do anything, but if they try to hit
    your account or if they are ever caught, you have the docs showing
    you were in fact a victim. Also, got to RipOffReport.com and file a
    complaint. It may be too late for us, but if we all put complaints
    there, it will stop others from falling victim to this scam.

    November 5th, 2008 at 8:53 am

  19. julie:

    Everyone on here, great job in deterring the rest of us from CB and
    all these other scam artists. I’m so sorry to those of you that
    fell victim to their trap, it could have been any one of us.
    Valuable lesson to all ‘ if it sounds to good to be true’ than it
    probably is.

    November 6th, 2008 at 12:23 pm

  20. Sinn:

    I would also suggest that you guys go here and report your account.
    http://www.fraudwatchers.org/forums/index.php/dontfollow They have
    people there to help victims of these scams. Additionally they will
    be able to better direct you as to how to cover your rear from
    identity theft with the group of scammers you guys dealt with.

    November 6th, 2008 at 12:54 pm

  21. cristy:

    Kacie, i was told the same thing… They called me and said I
    needed to send another $820 to get the loan or I can get a refund
    December 3rd on the next billing cycle. I’m thinking, yeah
    right~they scammed me and i should of never sent the money…
    Nothing i can do now, I learned a lesson!

    November 8th, 2008 at 11:16 am

  22. If you have been scammed, report it to the FTC online at
    http://www.ftc.gov or by phone, toll-free, at 1-877-FTC-HELP
    (1-877-382-4357).

    November 10th, 2008 at 8:23 pm

  23. Leona:

    I went through the same thing with a company called Clearview
    Lending Services out of Orlando, FL. Their website looks exactly
    the same as Cedarbrook’s. I paid them $1800 for a loan, was told
    the lender backed out but they found me a $10,000 loan, but in
    order to secure it I needed to pay another $1800! I requested a
    refund, but they told me I had to wait until Dec 15, for the
    lender’s next billing cycle. I don’t even know if I’m going to get
    that refund.

    November 17th, 2008 at 6:42 am

  24. I was contacted by Henry Wilson at Cedarbrook Lending in October
    2008 and was advised that I had been approved for a $5000 loan.
    However due to my past credit history to secure the loan I would
    have to put 6months up front to secure my loan. I thought about it
    and tried searching on them, but came up with nothing so I went
    ahead and did it, now wishing I hadn’t. Then on the day I was
    suppose to get my loan I get another call stating my loan got
    reassessed and I would have to put down another 6 months. Although
    I was skeptical, I guess I was also desperate I sent it. Again the
    day I was suppose to get my loan I get a call from Stanley Denton
    saying the lender backed out of the contract and that on the next
    billing cycle 11/24 I would get my money back and that their legal
    department would be taking action against the lender because they
    breeched the contract and that If I wanted to do another loan I
    could, I said no I just want my money back. Now I can’t get a hold
    of them on the phone, I searched on the company again and find all
    these posts regarding there scams. Christmas is here and now I’m
    broke, my children and family have to suffer now. I need a way to
    let everyone know and try to get back what’s mine.

    November 18th, 2008 at 1:28 pm

  25. frank:

    These idiots at cedar brook lending did the same crap to me. They
    said I was guaranteed a 5,000 loan and had me secure it with 910.00
    up front. I sent it to them and Stanley Denton called me back the
    next day and said that my lender backed out completely and told me
    that he had a new lender that was willing to work with me if I sent
    in another 910.00 to secure a 10,000 dollar loan so I sent it to
    them. He told me the money would be in my account by 3 to 8pm the
    next day. He called me back the next morning and said the lender
    wanted another 910.00 because the 1,800 dollars that I put up to
    secure the loan wasnt enough. I just told him that I wanted a
    refund and told him that I’m not going to get scammed out of
    anymore more money and he got really mouthy and defensive with me.
    He said i’m going to have to wait untill November 24th for the
    billing cycle. I doubt I will see a dime because I cant even get a
    hold of them on the phone or on the website.

    November 18th, 2008 at 6:39 pm

  26. Terri:

    WE too fell for Cedarbrook Lending’s line of bull!!!There are many
    of us. I looked a month ago for information on them and couldn’t
    find anything negative so we assumed it was legit. Boy was I wrong.
    We wanted it and needed it to be true so much!!!! Our house is in
    foreclosure and we saw this as a way of getting caught up. Now we
    owe people money we can’t pay back and we still could lose our
    house. I would love to have 5 minutes alone with these guys!!!!!
    There is another good wesite I lucked on to last evening. It is
    http://www.scamwarners.com/dontfollow. The list of victims goes on and on.
    We all need to stick together and file all of the complaints and
    reports we can so we can see these crooks brought to justice. I
    would almost go to the trial just so I could see them pay!!!

    November 19th, 2008 at 5:25 am

  27. Diane:

    I too was scammed by Cedarbrook Lending. I was told that i was
    approved for a 5,000 loan and that I had to pay 8 months collateral
    payment. I paid the money and the day that the money was supposed
    to be deposited, they called back and wanted 8 months more. I’m a
    single mom with 4 kids and it couldn’t have happened at a worse
    time. I was taken for 1888.00 by Henry Wilson and Stanley Denton.

    November 21st, 2008 at 3:24 pm

  28. Peter:

    I too became a victim of CLEARVIEW LENDING SERVICE. I went for a
    loan of $20,000.00 I had to wire through MONEYGRAM to a person in
    CANADA. This was for 6 months of advance payments. Then a problem
    over the weekend. Again on Monday wire more money. Then on Tuesday
    I get another phone call saying the lender backed out and I could
    get a $40,000 loan with another ammount wired for $3,980. All money
    would be applied to the ammount of the loan. I have spoke with the
    following people 1) Samual Jaminson Ex 652 (??) 2) GLEN RUSSELL Ex
    01 (Customer Service) 3) DAVID GREY Ex 174 I asked for my refund
    and they said Dec 8,2008 by 5PM. So far I am out $4,040.00. So now
    instead of only $20,000 in debt I am $24,000 in debt. Well I have
    filled complaints with the following Better Business Bruea of
    Orange County Florida Florida State Attorney General Office Federal
    Trade Commision FBI IC3 Unit A local TV STATION I for one do not
    see my money comming back. A hard lesson learned. I just wish
    someone would wind up in JAIL for life. BASTARDS

    November 22nd, 2008 at 7:30 pm

  29. Billie:

    Peter, Clearview and Cedarbrook are the same company. Cedarbrook
    closed up shop because of all the complaints and they were going to
    get caught. Clearview is their new name. They are the same people.
    Go to http://www.scamwarners.com/dontfollow There are alot of people there
    in your situation and they offer some good advice.

    December 9th, 2008 at 3:37 pm

  30. Kevin:

    I thank you all for this blog site. I was just contacted by The
    Essex Lending Group in NJ. It went down exactly like you said. I
    was approved for $30,000. Holy Crap!!!! 4 real I was also required
    to put down 6 payments in advance in the amount of $1780. They made
    1 crucial mistake and didnt even realize it. I had received 2
    different calls within 5 minutes by 2 different people. When I
    informed the 2nd caller of the 1st call, he seemed uncertain and
    upset. MOMMA DIDNT RAISE NO FOOL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    Thanks again!! You guys rock and I can keep my money and come out
    of it the hard way.

    January 26th, 2009 at 4:13 pm

  31. Kevin, I’m really glad you found this information useful and it
    saved you from getting scammed. Hopefully more people find this
    post. Obviously scammers are hard at work and aren’t going to stop
    anytime soon.

    February 3rd, 2009 at 2:41 pm

  32. Alonso:

    Certainly, the high level of debt that most families have
    experienced is due to several reasons. One is the stagnation of
    wages, which have hardly changed in the last ten years, which, in
    practice, is a decrease in the purchasing power of income.
    Secondly, the sustained increase in prices of inputs and services
    during the same period of time (inflation)by which, actually,
    became a decreased income. And, on top of all this, the strong
    increase in variable interest rates that apply to the new
    impoverished debtors, situation that unfortunately coincides with
    the present financial crisis and real state slowdown. This
    combination of factors makes that heavily indebted cardholders
    becomes the victims for unscrupulous lenders. A great web place,
    almost as good as this one, where you can find relevant information
    about this issue is
    http://www.mydebtconsolidationblog.com/dontfollow.

    March 16th, 2009 at 6:46 pm

  33. victoria:

    stay away from culver solutions also 1-866-467-0659, george cook
    sent $$ to them to canada no less, i’m still waiting for my refund
    in 30 days, have the attorney general involved……………

    May 26th, 2009 at 11:46 am

  34. Sinn Hunter:

    Victoria, please keep us updated on Culver Solutions (I assume
    you’re talking about http://www.culversolutions.net/dontfollow
    right?). ~ Sinn

    July 6th, 2009 at 2:47 am

  35. I am reading thru all this and realize that I received a phone call
    today about basically the same thing. I was approved for a $100,000
    loan. I needed to put up 6 months of payments then would receive
    the loan the following day. Sounds like a good deal right?? SO did
    all of yours too. Good thing I was a little nervous about it and
    started looking into loan scams and see that the terms I was
    offered fit everyone else’s. The only difference is I received my
    call from a company called Leaside Lending Group. I hate to get on
    here and just repeat the previou 18 posts saying the same thing,
    but I did just want to add the company name that I was called from
    so people know who to be looking out for!!!

    August 10th, 2009 at 1:14 pm

  36. Jessica:

    Beware of Goldsmith Lending Services. AFter I wired the money, I
    immediately had that feeling of nervousness and guilt- and I was
    right. She is now not answering any calls. As soon as she said she
    wasnt exaclty positive when the money would be in my account AND i
    was wiring to Canada so they couldnt track the number. I already
    filed a complaint to the FBI, FTC, and I am going to continue and
    proceed with this until this people get caught!!! That is just
    insaneeee!!!!!! I felt embarrased at first, but I see that millions
    of people do it!

    August 24th, 2009 at 7:45 am

  37. victoria e:

    I was approved for a $5000.00 loan from a company called Yorkview
    Financial. They have a website but if you google them nothing comes
    up. BBB has only heard of this company since March 2010 but don’t
    have any other information for them. They told me I needed to send
    $800.00 first for 5 months payment and I wouldn’t have to make a
    payment for 5 months. This sounds like the same people just under a
    different name. I’m am so sorry to all the people that have lost
    money because I would have been sooo devasted had I fallen prey to
    these theives.

    March 18th, 2010 at 6:11 pm

  38. 55SF:

    Such a useful post. The problem about scams is that they reinvent
    new schemes all the time, so it’s hard for regular people to stay
    updated on them.

    July 27th, 2010 at 9:02 am

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