East Tennessee Woman Falls Victim to Loan Scam, Community Responds

Inside Subprime: August 23, 2019

By Jessica Easto

Earlier this summer, a woman in Harriman, a town about 40 miles east of Knoxville, Tennessee, fell victim to a personal loan scam and ended up with her bank account drained. After a local news station reported on her story, East Tennessee residents offered to lend a helping hand.

It all started in June when 59-year-old retired nurse Carol Gatewood sought out a personal loan in order to consolidate a few bills. Gatewood lives alone in a low-income apartment complex with her comfort dog, Precious, and has relied on social security disability payments since physical setbacks forced her out of regular employment nearly 20 years ago.

She found a personal loan company that she took to be legitimate and applied for online for a $500 loan. Soon after, the loan company sent Gatewood a check for more than she requested.

“They told me that they were going to do better than $500, and going to give me a loan of $1,500,” she said. “I thought it was amazing, because I just live on Social Security.”

Harriman deposited the check in her account, the number of which she supplied the so-called loan company as part of the application process. Soon after, she discovered the “loan company” was fraudulent. The company told her to buy money cards, which overdrew her bank account. When she called the company, as instructed, to give them the numbers on the money cards, she knew it was a scam.

According to a 2018 BBB report, scams like the one that Harriman fell prey to account for $50 billion in lost and stolen money, and those in Harriman’s age group accounted for 20.8 percent of all scams and lost a median of $400, the most of any age group.

The scam left Harriman behind on her rent and facing eviction. But Harriman was lucky—her community responded to her story and someone even anonymously paid Harriman’s rent. Others donated enough money for her to be debt free.

According to an updated report, Harriman said that she “learned from her experience that legitimate lenders will ask questions, and legitimate loan companies won’t send you a check for more than what you requested.”

Experts advise that you never give anyone access to your bank account, credit card info, or pin numbers.

Learn more about payday loans, scams, and cash advances by checking out our city and state financial guides, including Florida, Illinois, Chicago, Ohio, Texas, and more.