Dear ABC News Fixer: My problem is with a loan broker called Lancaster Financial Solutions. They approved my application for a $5,000 personal loan but said that because of my credit record, I needed to pay collateral in the form of my first 14 monthly payments.
I wired them a total of $1,672, but my loan never came through. Then they said they would need more collateral to attract a lender. I told them I wanted a refund.
I was told I had to wait three and a half weeks while they contacted the lender for a refund. I borrowed from my whole family to make the payments, and they are all devastated as well.
- Amanda Cronk, Pleasant Valley, N.Y.
Dear Amanda: You told the ABC News Fixer this company seemed on the up-and-up, from its business address at 111 Wall Street, New York, to its legitimate-looking loan documents. We looked at those papers and could see why someone might think it was a normal loan company.
The problem is with the set-up: Taking fees for the promise of a loan is illegal.
In the midst of our investigation into this, Lancaster Financial Solutions' website mysteriously went down. The phone numbers listed for the company were disconnected. Our emails to the people listed as the CEO, various brokers and the website administrator all bounced back.
Meanwhile, the online complaints were piling up.
When we tried to visit them in person in late May at that fancy Wall Street address in Manhattan – near the river, where Citigroup has offices – all we found was a bunch of construction workers hammering away inside an empty building. We asked the two security guards if they had ever heard of Lancaster Financial Solutions.
"There's no one here except the workers and us," one guard replied. "The building's been closed since Hurricane Sandy."
Unfortunately, it looks like you paid for a very costly lesson -- $1,672, plus $76 in wire transfer fees. Let's hope your sad experience helps prevent the next person from losing money.
We suggest you get this on the record with the New York Attorney General's Office by filing a complaint by CLICKING HERE or calling (800) 771-7755.
The NY AG also offered this advice on spotting advance-fee loan schemes:
Advance-fee loans often target consumers with credit problems or no credit history, or people who are unemployed or who need cash for an emergency.
They "guarantee" or make it seem highly likely that the loan will be approved.
Ads for such loan schemes may appear in legitimate media sources, such as newspapers, radio or cable TV. (Lancaster Financial Solutions' now-vanished website included links to ABC News and other media sites, despite the lack of any affiliation.)
It's illegal for companies to promise a loan in exchange for money up-front.
New York state law limits broker fees to 0.5 percent of a non-mortgage loan. And again, no fees can be assessed before the loan goes through.
- The ABC News Fixer
Got a consumer problem? The ABC News Fixer may be able to help. Click here to submit your problem online. Letters are edited for length and clarity.