TDCI warns of loan payment protection insurance scam
The Tennessee Department of Commerce and Insurance is warning consumers about a national insurance scam targeting consumers looking for privately funded loans.
There have been victims in three states, including Tennessee where a man in Johnson City says he lost $18,000 to scammers.
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The California Department of Insurance Enforcement Investigators says the scammer's contact people who have searched online about getting a loan.
They then tell the person they can arrange the loan, but the borrower must first purchase a “Loan Payment Protection Insurance” policy that will pay the loan, in case the borrower can't make a payment.
The scammers provide a certificate of insurance (see photo above) that appears to be issued by the California Department of Insurance, but it is fraudulent.
Like TDCI, the CDI is a state agency that doesn't issue insurance certificates.
If someone offers to loan you money and requires you to purchase a loan guarantee policy do not send them money or provide any personal information.
If you suspect you are a victim of this scam, you are urged to contact the California Department of Insurance Consumer Services Division.