Ken Paxton
Consumer Protection

Beware of So-Called "Large Fund" Loan Officers

Texas consumers have notified us that they answered newspaper ads for loans to "large fund borrowers." Victims were instructed to wire a large fee (about $2000), after which the company promised to deposit the loan in the consumer's checking account within 24 hours. Weeks later, the money still has not been deposited and the company is giving the consumers the runaround.

Advance fee loans (loans that are not funded until after the consumer pays fees up front) are illegal. The use of wire transfer instead of US Postal Service is another warning sign. Scammers often use wire transfer to avoid federal mail fraud charges. Victims in this case also supplied personal financial information and are therefore at risk of identity theft.

Beware of easy credit offers that seem to good to be true. Legitimate lenders will not charge a fee up front before funding a loan or ask you to use wire transfer.

ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.

Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.