Consumers warned of online loans

The Nebraska Department of Banking and Finance is warning Nebraska residents about two Internet-based companies offering personal loans to consumers.

Barstow Brokers claims to be based at 11110 Fort St., Suite 201, in Omaha, and 1st Liberty Financial Corp. lists its address as 2900 S. 70th St., Suite 200, in Lincoln. The department said in a press release that it has verified that the companies do not have offices at the addresses listed.

Both companies require potential borrowers to pay fees of between $200 and $1,500 in advance of funding any loan.

The department urges consumers to exercise extreme caution when completing online loan applications that require personal information. Money often is not the only thing scammers are seeking; many are after personal information, officials said. With the application, the scammer has access to a consumer’s Social Security number, credit card numbers, and bank account information.

Before doing business with a company which offers to provide or assist in obtaining a loan, the banking department recommends that people contact the department to ask about the company’s compliance with Nebraska law. Online lenders often attempt to bypass state laws and avoid complying with state licensing requirements.

Nebraska law prohibits lenders and loan brokers from collecting fees prior to closing a loan. This prohibition does not apply to financial institutions and lenders that are licensed by the state. The department says people should not do business with a company that requires a would-be borrower to send fees or make advance payment on the money he or she wants to borrow.

Other warning signs of lending fraud are being asked to wire the money, particularly if the wire is to an address outside the United States, and promises of low rates or instant approvals.

Loan scams should be reported to the Nebraska Department of Banking and Finance by calling its consumer hot line toll free at (877) 471-3445 in Nebraska, or (402) 471-3445 out of state, or by visiting the department’s website at www.ndbf.ne.gov and completing a complaint form.

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