Protecting Yourself From Refinancing Fraud - WBAY

Target 2 Consumer Alert

Protecting Yourself From Refinancing Fraud


A small business owner thought she was getting a great rate to keep her business afloat, but it turned into a refinancing nightmare.

Now she's sharing her story to help protect others from falling victim to the same fraud.

The victim, who wanted to remain anonymous, said she and her husband needed to refinance their business but the bank turned them down.

"Our mortgage company gave us his information and he said he was basically capable of getting anything done that none of the other lenders would be able to do," said the victim.

Postal inspectors describe what really happens.

"For an upfront advance fee he would hook them up with conventional financing with a bank or he would finance it himself," said Michael Egner, U.S. Postal Inspector. "They come up with this money and in some cases these people have to borrow the money for the advance fee from friends, relatives or whatever because they are deathly afraid of losing their business."

Hope quickly turned to disappointment for the victim.

"Whenever we were supposed to meet or discuss the details, something would come up," said the victim. "His mom would be in the hospital or he had to travel for another client."

Investigators say 32 victims lost more than $350,000.

"For the safety of my children and our credit history and worrying that our credit was compromised for the future--anything... basically the unknown of figuring out how far he went with our information," said the victim.

Postal inspectors say consumers trying to refinance should ask for references and ask many questions.

Egner says these questions are good ones to ask:

  • Did you get your loan?
  • Were you able to get it back?
  • What was the financing?
  • What was the interest?
  • Was it through a bank?
  • Was this the type of person who lends you their own money?




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