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Loan scam bilks dozens out of cash in several states

Loan scam bilks dozens out of cash in several states

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Don't send money to Canada, authorities say

A Missoula woman says she was bilked out of $800 when she answered a newspaper ad last month offering a loan joins several dozen people who have been victimized by this scam, which originates in Canada.

The victim, who was not identified, told Missoula County sheriff's deputies that she answered an ad that appeared in the Missoulian for a week in early April.

"Obviously there is no money there," said Detective Gus Laforge, a North Bay, Ontario, provincial detective constable. "This whole thing is a scam, but they're making a lot of money at it."

The ad, by Barnes and Associates, listed a toll-free phone number and promised low-interest personal or business loans with no up-front money required, regardless of bad credit.

But when the woman called to obtain a $65,000 loan, she was told to mail $800 to a post office box in the Canadian province of Newfoundland in advance of receiving the money to insure the loan, according to Detective Dave Fowlkes.

She also was told the money would be returned after she paid off the note, he said.

On April 13, the woman sent a money order to a post office box, which Ontario police say is located at a storefront. She never got her loan.

Canadian authorities have received complaints about Barnes and Associates from Idaho, Mississippi, Missouri, Georgia, New Hampshire, Rhode Island, Indiana, Texas and Ohio, and more are being received daily, said Laforge.

"I'm sure they're all American," he said, noting the difficulty in prosecuting claims from another country and the leniency of the Canadian justice system.

"There's no doubt that's the only reason they're up here. It's a slap on the wrist," said Laforge. "It's a cost of doing business for these guys. They don't mind paying a $100,000 fine or whatever; they make that and more in a week."

He estimated that 100 such companies operating in Toronto alone are grossing $150,000 to $160,000 a week.

"That's the kind of money these guys make," he said. "Loan scams, Canada: synonymous."

Janet Taylor, the Missoulian's classified advertising manager, said every effort is made to ensure that firms advertising in the newspaper are credible, but she said it's difficult to track a scam operator.

"We reject many ads every day because we really try to make it our policy that everything is credible and believable in the Missoulian classified," said Taylor. "We have to be on constant alert for different scams."

A warning also runs periodically in the classified section advising readers to thoroughly check out any offer.

"The key has to be the content of the ad," said Taylor, adding that policy is companies that advertise "no credit, no problem," aren't allowed to advertise.

"It's just been recently that we have seen this huge surge," she said.

In several instances in the case of Barnes and Associates, loan applicants were asked to send their money order to an address in the U.S. but Laforge said those are in turn forwarded to Canada.

Authorities were able to close a post office box in Ontario, where the Newfoundland box was being forwarded to, and seized 14 envelopes. They are returning some checks (from $300-$900 each) to their senders.

People also send Social Security numbers, banking and other information.

"It's just amazing what people send to these companies up here," said Laforge. "People are desperate when they can't get a loan locally. Whatever it is that they tell them over telephone, they're convinced that they're going to get a loan."

He warned U.S. citizens never to send money to obtain a loan or a credit card.

"If you're asked to send any money up to Canada, don't do it," he said. "More than likely it involves a scam. If it has to do with a prize venture or a loan or a lottery or a sweepstakes, it's illegal. … We get a lot of complaints. It's a huge problem."

No one answered the telephone at the number the company listed in the ad.

Been had?

If you believe you've been victimized in a scam, report it to the City Police Department, 523-4777, or the Missoula County Sheriff's Department, 523-4810.

Reporter Mick Holien can be reached at 523-5262 or at mholien@missoulian.com.

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