Beware of Fraud and Scams in the Lending Industry: A Guide to Protecting Yourself

[Roger Mace]

Beware of Fraud and Scams in the Lending Industry: A Guide to Protecting Yourself

The lending industry, unfortunately, can be rife with fraud and scams. To safeguard yourself and your investments, it is crucial to conduct thorough research before engaging with any lending entity. Below, I outline several incidents that demonstrate the importance of vigilance in this industry.

Incident 1: Noble Capital Loans
Noble Capital Loans presented itself as a Georgia-based corporation with favorable loan terms. However, upon closer inspection, several red flags became apparent:

1. Lack of Transparency: Despite claims of being a Georgia corporation, a search in the State of Georgia Secretary of State’s Division of Corporations database revealed no record of the company. Additionally, there was no business license registered in the City of Atlanta.

2. Suspicious Communication: The individual identified as Chris Anderson had a heavy foreign accent and provided convincing but dubious claims about the company's legitimacy.

3. Questionable Financial Arrangements: Upon loan approval, the wiring instructions directed the loan fee to a Capital One checking account under the name of a supposed loan facilitator—a 85-year-old woman in Florida. The facilitator’s address was in a mobile home park, and the bank account could not be verified.

4. Inconsistent Identification: Despite receiving a copy of Chris Anderson’s driver’s license, phone number tracing showed no connection to him.

Incident 2: 2nd Financial Opinion Services
This entity appeared more sophisticated but was equally deceptive:

1. Authentic-Looking Documentation: The LLC was legitimately registered in Missouri, with a seemingly professional website and clean background checks.

2. Misleading Identification: After requesting proof of legitimacy, a passport with the supposed principal's photo and corporate documents from the State of Missouri were provided. However, when contacting the principal’s home, his wife confirmed the passport photo was not his, and the birthdate was incorrect—despite the signature on state documents being authentic.

3. Unauthorized Use of LLC: The actual owner, a 78-year-old retiree, was unaware that the LLC was still active and had never conducted any business under its name. Following this discovery, he promptly contacted his attorney to dissolve the LLC.

Additional Questionable Entities:

• Dogwood Capital Investments
• M&M Capital Finance LLC

Key Takeaways:

1. Conduct Thorough Research: Always verify a company's registration with state and local authorities.
2. Scrutinize Documentation: Examine identification and corporate documents closely for inconsistencies.
3. Verify Contact Information: Ensure that all provided phone numbers and addresses are legitimate and connected to the entity.
4. Be Cautious with Payment: Avoid wiring funds without extensive verification of the recipient's identity and legitimacy.

While the majority of direct and private lenders operate ethically, even a single fraudulent interaction can damage your reputation and finances. Private money brokers can add value by thoroughly vetting lending opportunities and prioritizing client success over commissions.

Stay Vigilant:
Protect yourself and your clients by remaining vigilant and conducting comprehensive due diligence in all lending activities. Your diligence can make all the difference in ensuring safe and successful investments.