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The Texas attorney General’s office has issued a consumer alert for Texans looking to borrow money for the holidays. Advertisements for instant cash loans are everywhere this time of year and many are legitimate. However, a new kind of “loan” ad is appearing that offers fast money for an upfront “processing fee” or to cover “taxes”. The Attorney General’s office states that consumers should avoid these because authentic lenders never ask for money up-front.The scam loan offers are often promoted as on-line instant loans, or in flyers and newspapers classified. They give an appearance of authenticity by providing a toll-free number to speak to a “bank representative”, or by sending official looking sales materials in the mail. The availability of Cash loans with no hidden fees should be there for the person. The selection can be done after checking the news papers and magazines for the benefit. The taking and repaying of the loan amount will not add to the expenses of the person. 

After respondents sign up they are told to wire hundreds of dollars to cover the fees, only to have that money disappear with the con artist. Most of the scammers are based out of the country, regardless of where their correspondence appears to originate, and are extremely difficult to trace. Disposable cell phones and anonymous drop boxes are just some of the standards tools used. Texans who fall for the scam could be sending their money half-way around the world, where it can be picked up from one of thousands of locations.

Of course, Texas isn’t the only state where this kind of scam is operated. Payday lending and online cash loans make every place a target, even in states where the practices are strictly regulated. Consumers should always stop to read the fine print when applying for a loan, and shop around to compare their options. Remember that loan representatives often work on commission or bonus structures even in legitimate franchises, so be aware of sales pressure. To truly avoid paying unnecessary fees, pay day loans should be a last resort to cover expenses when all other options have been exhausted.

The Attorney General recommends that consumers who need extra money to cover expenses during the holidays look to local options first, where the exchange can be made person to person and in a state regulated operation. Legitimate local lenders will be listed with the Texas Department of Banking, and can be verified by calling the 1 (877) 276 – 5554, or at www.banking.state.tx.us. You should also guard your personal information carefully – legitimate lenders usually need Social Security numbers to run credit checks, but con artists can take that information and commit identity theft.