Authorities are warning of yet another scam targeting online loan applicants. This time it's an advance fee loan scheme involving MortgageTree Lending, a company that is finding plenty of victims online.

Advance fee loan scammers typically request a would-be borrower to make a 10 to 20 percent deposit on the money they want to borrow. MortgageTree Lending is asking its customers to wire money to Canada to cover miscellaneous loan and finance charges, according to authorities.

MortgageTree Lending lists its headquarters and central offices in San Jose, California. However, the local Better Business Bureau says no such offices exist, and a search of California's Department of Corporations turns up no records on MortgageTree Lending of San Jose.

Zach Vander Meeden, public relations director for the San Jose BBB, says complaints against MortgageTree Lending began on September 24. The BBB has received 14 complaints in the past month, and losses to victims total US$20,000. Canadian authorities say they've also received several complaints about the firm.

Canadian law enforcement says that advance fee loan scams are finding new life as cash-strapped people with bad credit turn to alternative lenders who advertise online.

"When every traditional lender turns you away, people click onto the Internet and are surprised how easy it is to get a loan," says Louis Robertson, corporal in charge of the criminal intelligence analysis unit for the Royal Canadian Mounted Police.

Diary of a scam victim

"Now it seems really stupid to have sent them my money," says Lekiesa Willis, of Hope, Arkansas. Willis says she lost US$1630 in advance fees when she was told by MortgageTree Lending that in order to borrow US$5000 she would have to wire fees up front.

Willis found MortgageTree Lending in September when she typed in the questions "Where do I get a US$5000 personal loan with bad credit?" into the Ask.com search engine. She followed a link in the search results and was taken to a site that prompted her to provide an e-mail address and phone number. The next day Willis says she received a phone call from MortgageTree Lending asking her to fill out a formal loan application and fax it back.

At first she was told to wire US$950 as an "insurance premium" and she would get that money back. Days after Willis wired the money, a MortgageTree Lending representative asked her to wire an additional US$680 in taxes and fees. She wired the money and waited, and waited.

Willis says it's been hard to get in touch with MortgageTree Lending. When she does, she is told to be patient. Last week, Willis says, a representative of Mortgage Tree Lending called to inform her that her loan had been increased to US$9000, and asked her to send an additional US$860. Willis refused and asked for a refund. The representative told her it would cost US$309 for a refund and it would take three months to have the money mailed to her, she says.

"I feel humiliated and defeated," Willis says. "Worst of all, I still need the money."