The Federal Trade Commission and the British Columbia Ministry of Attorney General announced that starting today, uncashed checks and money orders totaling approximately $50,000 will be returned to 139 U.S. consumers who were victims of a fraudulent Canadian-based advance fee loan company.
The uncashed checks and money orders, ranging in value from approximately $200 to $1,500, were confiscated as a result of a recent action in Canada by the BC Attorney General in cooperation with the FTC. The checks and money orders were sent in January and February 1998 by consumers in more than 25 states hoping to obtain loans from Allied Credit Referral Service, operating out of Richmond, British Columbia.
Allied Credit advertised advance fee loans in newspapers and tabloids in the United States. Consumers who called Allied's telemarketers were told that they were certain to be approved for a loan and were asked to pay an upfront fee. After receiving the consumers' money, Allied then referred the consumers to a United States "turndown room" run by Gary Walton of Prescott, Arizona. Walton turned down the consumers' loan applications and consumers lost their upfront fees. Allied, Walton, and 35 other firms and individuals promoting advance fee loans were targeted in January 1998 as part of "Project Loan Shark II," a joint crackdown by U.S. and Canadian law enforcement authorities against telemarketing firms and individuals allegedly engaged in advance fee loan scams. (In June, Gary Walton agreed to settle FTC charges against him.)
As part of Project Loan Shark II, the BC Ministry of Attorney General issued a Cease and Desist Order against Allied Credit Referral Services. Along with that order, the Ministry also obtained a court order requiring United Parcel Service Canada and Federal Express Canada Ltd. to hold any packages sent to Allied and to turn the packages over to the Ministry. By taking this action, the Ministry was able to stop the flow of consumer funds sent to defendants from the United States into Canada. A subsequent order by the Supreme Court of British Columbia authorized the Ministry to return the seized checks to the victims.
The FTC and the BC Ministry of Attorney General offer these tips for consumers to keep in mind before responding to ads that promise easy credit, regardless of credit history:
FTC brochures with the tips for avoiding advance-fee loan fraud, the complaints and settlements in the FTC cases, and the list of all cases brought as a part of Project Loan Shark, are available from the FTC's web site at: http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 202-326-2659. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710.