SCAM LIBRARY · MONEY & PAYMENT

The advance-fee loan

Scammers pose as lenders and promise you a loan, but first ask you to pay an upfront fee—money you'll never see again.

Documented by the FTC & FBI IC3 · reviewed 2026-07-06

How it works

You receive an unsolicited offer for a loan (by phone, email, text, or mail), often claiming you've been pre-approved or that your credit doesn't matter. The scammer creates urgency, saying the offer expires soon or that you need to act now. Once you agree, they ask you to wire money, use a gift card, or send cash as a 'processing fee,' 'insurance,' or 'guarantee'—but the loan never materializes.

Red flags

• Guaranteed approval with no credit check, or approval despite poor credit
• Request for upfront payment before any loan is issued
• Pressure to pay quickly via wire transfer, gift card, or cash
• Offer arrives unsolicited, and the lender is unfamiliar or has no verifiable local presence

What to do

• Legitimate lenders never charge fees before the loan is funded; if anyone asks for upfront payment, hang up or delete the message.
• Check with your bank or credit union directly about loan products, rather than responding to unsolicited offers.
• Report the scam to the Federal Trade Commission at reportfraud.ftc.gov so authorities can track these schemes.