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STATE BANKING OFFICIALS ASK FEDERAL TRADE COMMISSION FOR HELP IN ENDING ADVANCE FEE LOAN BROKERING OPERATIONS

 STATE BANKING OFFICIALS ASK FEDERAL TRADE COMMISSION
 FOR HELP IN ENDING ADVANCE FEE LOAN BROKERING OPERATIONS
 HARRISBURG, Pa., Dec. 13 /PRNewswire/ -- Pennsylvania Banking Secretary Sarah W. Hargrove and top financial services regulators in 37 other states have asked the Federal Trade Commission (FTC) for help in ending advance fee loan scams.
 In a Dec. 12 letter to FTC Chairman Janet Steiger, Hargrove requested a meeting with both Steiger and Barry Cutler, director of the FTC's Bureau of Consumer Protection, "to discuss a matter of increasing concern and importance among state agencies -- that is, the proliferation of advance fee loan brokering scams throughout the United States."
 According to the Pennsylvania Banking Department, the so-called brokers accept advance fees for loans they have no intention of securing.
 Hargrove said most state laws do not specifically prohibit advance fee loan brokering scams.
 "Rather, state unfair trade practice statutes address the issue in a general way but are usually triggered only after many consumers have been victimized," Hargrove wrote the FTC. "At that point, the scam operators simply switch states and change names; by then, as proven by experience, it is neither efficient nor effective for individual states to track the operators and recover damages."
 The 38 state regulators asked the FTC to work with the states to develop a comprehensive nationwide strategy "to eradicate such advance fee loan brokers."
 The letter bears Hargrove's signature, followed by that of financial services regulators in Alabama, Alaska, Arizona, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
 Pennsylvania's problems with nationwide advance fee loan brokers began in July, when three firms operating in Florida moved their operations to Philadelphia after Florida enacted legislation banning loan brokering.
 Pennsylvania closed down the three firms -- International Credit Corp., Preferred Credit Corp. and National Acceptance Corp. -- this year.
 /delval/
 -0- 12/13/91
 /CONTACT: Stephanie Maurer of the Pennsylvania Department of Banking, 717-783-4721/ CO: Pennsylvania Department of Banking; Federal Trade Commission ST: Pennsylvania IN: FIN SU:


LJ -- PH022 -- 2375 12/13/91 12:47 EST
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Publication:PR Newswire
Date:Dec 13, 1991
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