Better Business Bureau: Funeral scams that involve loans

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

ST. LOUIS, MO (KTVI)- It’s Thursday and time for an update with the Better Business Burea. Bill Smith joined us on FOX 2 News in the Morning to discuss funeral scams that involve loans.

Recently, a St. Louis security guard may have lost nearly $800 in a phony advance fee loan scheme that began when he applied for a $2,000 loan to help pay the funeral costs for his slain son. He said the loss has been devastating, and he now doesn`t know whether he even will be able to attend his son`s services in Kentucky.

According to Michelle Corey, BBB president and CEO, the security guard`s case is especially troubling, given the circumstances surrounding the loan application. “If you are willing to steal money from a man trying to raise money for his son`s funeral, you are willing to steal from anyone,” Corey said.

Rarely has their office heard a story so heartbreaking.

The security guard said he had begun applying online for loans soon after learning of his son`s death. Recently, the man said, he received a text message that he had been pre-approved for a loan for up to $5,000. The message instructed him to call a toll-free number and, when he did, a man who identified himself as a loan consultant agreed to loan him $2,000. But before the loan could be processed, the self-described consultant told him the company would have to ‘test’ the ability to make a direct deposit into his bank account.

Soon after, the bank notified the security officer that $800 had been placed into his account, a deposit the guard now believes was fake. The loan company then instructed the father to refund those deposits by purchasing iTunes cards, loading them with $790 and giving the card numbers to the loan consultant. Once the thieves had the card numbers, they were able to empty the credits from the iTunes cards.

The security guard said he bought the iTunes cards from two local stores, and, despite the large amounts loaded onto the cards, neither clerk warned him of the possibility he might be the victim of a scam.

When the $2,000 loan never was deposited into the man`s bank account, he contacted BBB.

BBB offers the following tips to persons who suspect they may be victims of a scam:

• If you receive a solicitation, a prize announcement, or a business or loan offer, confirm who is contacting you. If you cannot determine independently who you are dealing with, contact local law enforcement officials, your attorney general`s office or BBB. If you can`t confirm who they are, cut off contact immediately.
• Never pay anyone you don`t know by using a wire transfer like MoneyGram or Western Union, a reloadable cash card or any type of gift card. All these payment methods can be extremely difficult to trace.
• Avoid paying anything in advance for a loan or a grant. Do not pay anything to someone who is claiming to collect a debt unless you receive proof of the debt in writing.
• When purchasing merchandise, deal only with businesses you know or those you can validate. Be especially suspicious of unfamiliar companies offering online deals.
• When making purchases, pay by credit card whenever possible in case you need to challenge the charge.
• Report scams to law enforcement or BBB Scam Tracker at https://www.bbb.org/scamtracker/stlouis.