Advance-Fee Loan Scheme Charges Settled

December 9, 2002
A Houston-based defendant that defrauded thousands of consumers nationwide through an advance-fee loan scheme has settled charges brought by the Federal Trade Commission. The FTC announced today a stipulated final court order settling the case against Antoine Peissel, doing business as The Woodway Group (Woodway), who told consumers they were guaranteed to receive a cash loan or line of credit - but only after paying an up-front $79 fee.

According to the Commission's complaint, Peissel misrepresented that consumers would receive their loan or credit within a week of completing an application. Instead, he left them with nothing more than complaints and a significantly lighter wallet.

"In yet another case, the FTC has exposed an operation that preyed on those most vulnerable and in need of financial help," said Bureau of Consumer Protection Director J. Howard Beales III. "Consumers, no matter what their financial condition, should be wary of such advance-fee schemes. They are illegal and usually result in people losing their money without ever seeing a dime of the promised loan or credit."

As lone principal of The Woodway Group, Peissel allegedly placed items in the Thrifty Nickel and other local "want ad" publications, prompting consumers from more than 20 states to call his toll-free number to obtain a cash loan. Typically, when a consumer called the number, Peissel or one of his representatives asked for information about their personal financial situation, as well as how much money they wanted to borrow.

The caller was then placed on hold, while the company said they were conducting an "instant credit check." The representative then told the consumer that he or she had been "approved for the loan," but had to pay a $79 "processing fee" and complete a loan application. The consumer was told that once the fee was paid and the paperwork completed, he or she could expect to receive the loan in a few days.

In many cases, believing that they had been "approved" for a loan, consumers allowed Woodway to debit the $79 fee from their checking accounts. After the fee was paid, Woodway either faxed or mailed the consumer a package of materials, including the loan application, requesting that they complete it, return it, and wait at least a week for a response.

This response, according to the FTC, never came, with consumers often waiting weeks for their loans before calling Woodway to complain. The FTC alleges that none of the consumers who paid a fee ever got their promised loan.

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