Key takeaways
- Any fee requested before funding is a scam; origination fees come out of the loan, never in advance.
- Guaranteed approval, pressure and payment-app fees are the three most common tells.
- Verify the licence with the state regulator and call the regulator's number, not the email's.
- If you paid, reverse the payment through your bank and report to the FTC.
The upfront-fee rule
No licensed lender charges a fee before funding a loan. Not a "processing fee," not "insurance," not a "first payment to show good faith," and never by gift card, wire, Zelle, Cash App or crypto. Origination fees exist, but they are deducted from the loan or charged at disbursement and disclosed in the APR. If money is requested before money is sent, it is a scam. This one rule catches most loan fraud.
Nine warning signs
- Guaranteed approval or "no credit check" with no verification of income or bank.
- Any fee before funding, especially by gift card, wire or payment app.
- Pressure to act now: "offer expires in 30 minutes."
- No physical address, no state licence number, or a licence that does not match the state regulator's database.
- Contact by unsolicited call, text or social media DM offering a loan you did not request.
- Requests for online banking passwords or remote access to your phone or computer.
- A website with no APR anywhere, or an APR above 100% presented as a "fee."
- Company name that mimics a real lender with a slightly different domain.
- Overpayment refund tricks: they "accidentally" deposit too much and ask you to send the difference back; the deposit later bounces.
How to verify a lender in five minutes
- Find the state licence number on the site and check it with your state regulator.
- Search the company name plus "complaint" and "CFPB."
- Check the domain age (a lender founded "in 2009" with a domain registered last month is not that lender).
- Call the number on the regulator's record, not the number on the email.
- Confirm the APR, fees and payment schedule are in the written agreement before you e-sign.
How True Finance works: we never ask for a fee, we only connect you with licensed lenders, and every offer shows the APR before you sign. See how it works.
If you already paid
- Stop all contact and do not send more money, even to "unlock" what you paid.
- Call your bank or card issuer to reverse the payment; gift-card companies can sometimes freeze balances if called quickly.
- Report to the FTC at reportfraud.ftc.gov and to your state attorney general.
- If you shared bank logins, change them and ask the bank to monitor or reissue the account.
- Place a fraud alert with one credit bureau (it propagates to all three).
Paying a second "release fee" never releases anything. It only confirms you will pay.
Sources
- FTC, "Advance-fee loan scams" consumer alert
- FTC, reportfraud.ftc.gov
- CFPB, complaint database (consumerfinance.gov/complaint)
- State financial regulator licence lookups
