Advance-Fee Scam

The mechanics are consistent enough to recognise from the first contact.

1. Unsolicited approach by text, email, social message or cold call, often referencing an application you did submit somewhere
2. An approval that is larger, cheaper and faster than your file supports, delivered quickly and with official-looking documents
3. A fee that must be paid before disbursement, described as collateral insurance, an escrow deposit, a rate lock, a first payment to establish good faith, a compliance or release fee
4. Payment demanded by wire, gift card, cryptocurrency or a peer-to-peer payment app, to an account whose name does not match the company
5. Urgency — the approval expires today, the underwriter is waiting, the rate is locked until close of business
6. After payment, a second fee. Then a third. Then the contact stops

Distinguishing real closing costs

Legitimate commercial closings do involve money out before funding: an appraisal, a title search, a UCC or lien search, a field exam, an environmental report, an SBA guaranty fee at closing, sometimes a genuine good-faith deposit against third-party diligence costs. What makes them legitimate is not the existence of a fee, it is everything around it — a signed commitment letter or term sheet that names the charge, states what it covers and says when it is refundable; a payee that is an identifiable business, law firm or title company; an invoice; and, where possible, netting at funding rather than a wire from you.

Reporting

Report it to the FTC at reportfraud.ftc.gov. If money moved by wire, tell your bank immediately — recall is occasionally possible in the first hours and almost never after.