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Blair Looney, president and CEO of Better Business Bureau of Central California.

Dear Action Line, I applied for a $4,000 loan online. I wanted to take care of some old bills that are past due.

But when the company contacted me about the loan, it told me I was approved but I needed to wire $450 to Canada to process the loan.

The ad I answered had a local address, so why would I wire money to Canada? How do I know if this is a good company?

First of all, you need to be careful that you are financing with a licensed and reputable financial institution. In your particular situation, you may have difficulty taking advantage of the best financing options because of the past due bills you mentioned.

Most reputable financial institutions require very good to excellent credit in order to receive the lowest interest rates when refinancing.

Here are some tips to avoid possible scams for consumers:

Check out the business first; go to to see if there is a history of complaints involving the organization. Research the company before you give it any personal information.

Check licensing. Loan companies must be licensed with the California Department of Business Oversight at or the California Bureau of Real Estate at If the company is requesting advance fees, contact the California Attorney General's office.

Be suspicious of anyone that asks you to wire money outside of the country.

Make sure you are totally upfront and honest with any potential lenders about the current state of your credit history. They will find out anyway and it is better to hear it first from you.

If you need help with your credit, you may want to contact a credit counseling organization. It may be possible to take care of those old bills without taking out a loan.

If you want to take out a loan, check with your own financial institution to see what it can offer.

Do some comparative shopping. Taking out a loan should be treated like any other business transaction. See what is available to you.

Research more than one company, check companies out with BBB. Find out what types of loans they can offer. Ask for information on interest rates. See if there are any penalties for early payoffs. Ask what the fees are for late payments. Do they require any collateral? This information should be sought BEFORE you sign any loan documents.

-- Blair Looney is president and CEO of the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems to Action Line at the Better Business Bureau, 1601 H St., Suite 101, Bakersfield, CA 93301 or