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Loan scam field guide

Spot a fake lender before you pay a cent.

How advance-fee loan scams work, the six red flags to watch for, and exactly what to do if you have already sent money.

See the red flagsI already paid
Updated October 17, 20267 min readFact-checked against primary sources
Person holding a smartphone that shows a red warning alert over a suspicious loan message
Reported fraud losses in 2025$15.9BFTC, from about 3 million reports

Key takeaways

  • Any upfront fee to release a loan is a reason to walk away.2
  • No legitimate lender guarantees approval before you apply.
  • Report scams at ReportFraud.ftc.gov.2

The numbers

How big the problem is

$15.9Blost to fraud reported to the FTC in 20251
3Mfraud reports in 2025, up from 2.6 million1
1M+imposter scam reports, the most common type1
$3.5B+lost to imposter scams1

Warning signs

Six red flags of a loan scam

$
Red flag

Upfront fee

You are asked to pay for "processing," "insurance" or "paperwork" before the money arrives.

Red flag

Guaranteed approval

Real lenders check your ability to repay. Nobody legitimate guarantees a loan before you apply.

Red flag

Odd payment methods

Requests to pay by wire transfer, gift card, cryptocurrency or a payment app.

$$$
Red flag

Out-of-the-blue offers

A loan offered by phone, text or social media that you never asked for.

?
Red flag

No state license

Lenders and brokers must register in the states where they do business.

Red flag

Pressure to act now

"Offer expires today" pushes you past reading the terms.

The playbook

How an advance-fee loan scam works

  1. 1

    The bait

    An ad, text or call promises a loan regardless of your credit, often with official-sounding names or logos.

  2. 2

    The 'approval'

    You are told you are approved, sometimes within minutes, before any real check of your finances.

  3. 3

    The fee

    Before the money can be released, you are asked for a fee for insurance, processing or paperwork.2

  4. 4

    The vanishing act

    After you pay, more fees appear, or the 'lender' stops answering. There was never a loan.

Check first

How to verify a lender in five minutes

Signs of a real lender

  • Licensed or registered with your state regulator
  • Shows the APR and finance charge in writing before you sign
  • Has a physical address and real customer service
  • Checks your credit and income before approving

Signs of a fake

  • Asks for a fee before funding
  • Wants gift cards, wire transfers or crypto
  • Uses a free email address or only texts
  • Copies the name of a real bank with small spelling changes

Already paid?

What to do if you sent money to a scammer

  1. 1

    Stop paying and stop talking

    Do not send more money, even if they promise the loan is one fee away.

  2. 2

    Call your bank or card issuer

    Ask whether the payment can be stopped or reversed, and report the fraud.

    Tip: Act fast. Speed improves your chances.

  3. 3

    Report it to the FTC

    File a report at ReportFraud.ftc.gov.2

  4. 4

    Protect your identity

    If you shared your Social Security number or bank details, check your credit reports for free at AnnualCreditReport.com and consider a fraud alert or freeze.3

  5. 5

    Warn your state

    Report the company to your state attorney general and financial regulator.

Report it

Where to report a loan scam

Where to reportWhat it handlesWebsite
Federal Trade CommissionScams, fraud and fake lendersreportfraud.ftc.gov
Identity theftRecovery plan if your identity was usedidentitytheft.gov
Consumer Financial Protection BureauComplaints about real lenders and debt collectorsconsumerfinance.gov/complaint
Your state attorney generalUnlicensed lenders and local fraudSearch your state AG website

Questions

Loan scam questions

Can a real lender charge an application fee?

Some real lenders charge application or appraisal fees, but no legitimate lender will say that paying a fee guarantees a loan. Any upfront fee to 'release' a loan is a cue to walk away.2

How much do Americans lose to scams?

Consumers reported losing $15.9 billion to fraud in 2025, from about 3 million fraud reports, according to the FTC.1

Someone called saying they are from Bison Cash USA. Is it real?

Bison Cash USA is not a lender and will never call to offer you a loan or ask for a fee. Hang up and report it to the FTC.

Are military families targeted?

Yes. Scammers often target servicemembers. Remember that covered loans to active-duty members cannot exceed a 36% Military APR.4

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Sources

Sources for this page

Official and primary sources only. Last reviewed October 17, 2026.

  1. 1
    Federal Trade CommissionRegulator data
    FTC testifies to Joint Economic Committee on efforts to combat fraud
    ftc.govMarch 25, 2026 · 2025 fraud reports
  2. 2
    Federal Trade CommissionRegulator guidance
    What To Know About Advance-Fee Loans
    consumer.ftc.govScam warning signs
  3. 3
    Federal Trade CommissionRegulator guidance
    You now have permanent access to free weekly credit reports
    consumer.ftc.govOctober 2023
  4. 4
    Consumer Financial Protection BureauFederal law
    What is covered under the Military Lending Act?
    consumerfinance.gov36% MAPR cap