How to identify and avoid loan Scam- See 10ways to identify loan scam.
In today’s article I’ll be revealing some ways you can avoid and identify loan scams.
10 Ways to identify and avoid loan scams.
When you need money and have a poor credit score, it’s easy to accept almost any offer for a personal loan. But there are scam artists waiting to take advantage of your desperation. They might be offered personal loans through online website advertisements. They could mail a flyer that guarantees a loan, regardless of your circumstance.
Here are some warning signs usually experienced by victims of loan scams:
1: No Interest In Your Credit History
Legitimate lenders evaluate a person’s creditworthiness before making a loan. Never listen to claims like “Bad credit? No credit? No problem!’’ There’s very definitely a problem — and it’s yours.
2: Upfront Fees
Also known as “advance-fee loan scams,” these lenders offer a low interest loan in exchange for an upfront payment. They disguise their intent with fees for legitimate-sounding purposes such as applications, processing, or documenting. They all mean the same thing, they’ll say “Send me some money before I perform any service.” Just think about it, You are being asked to send money to be loaned money. Often, you’re asked to make payment via prepaid card, a digital gift card from Apple, Google, Visa or the like you find in supermarket kiosks. That’s a scam. Run.
Legitimate lenders disclose all their fees. Oftentimes, these fees are rolled into the cost of the loan, not paid for in advance. Advance-fee scammers may offer the same arrangement, and may even create a fake ACH automated clearing house deposit to your bank for the full amount. You’ll see it in your account as “pending.” But end the conversation the moment they ask you to send that gift card; they’ll drain the card and that pending deposit will never clear.
3: Phone offer
It is illegal to make loan offers over the phone. Any offer must be put in writing. It must prominently mention all associated fees.
4: Wire Transfer
If the lender wants you to wire money for fees, it’s a big cause for concern. Never wire money to an individual. Always ask for the lender’s physical address. Then contact the Attorney General or Financial Regulations office in that state to verify it’s a legitimate business.
5: Copycat Name
In an attempt to appear legitimate, clever scam artists will invent a business name or website that looks or sounds genuine. It’s always advisable to check with the Better Business Bureau to authenticate the address and phone number. If the mailing address is a post office box, be very wary.
Also, have a hard look at the URL. Scammers will represent legitimate financial institutions on their websites, but when you inspect their web address, you’ll detect subtle clues, such as percentage signs, @ symbols, misspellings, or strings of numbers.
6: Personal Information
Never give out your Social Security number, date of birth, bank account number, or other important personal information unless you are 100% convinced you’re dealing with a responsible lending institution. Personal information can be used for identity theft which, according to the FTC, soared during the pandemic or stealing from your bank account.
7: State Registeration
Lenders and loan brokers are required to register in the states where they do business. You can check registrations through the attorney general’s office or the departments of banking or financial regulation in your state. That won’t guarantee a perfect experience with the lender, but it could help you identify a crook.
8: Reviews
Online reviews have become influential when it comes to restaurants, museums and movies. They also can help you pick a reputable lender. You simply Google the company or person’s name, while also checking Facebook, the Better Business Bureau, or other sites that specialize in lending reviews. If there are complaints or bad reviews, take note. If there’s consistency across several locations, with everyone forming an unfavorable impression, that is a warning.
9: Customer Service
Reputable lenders have a phone number where you can easily call and get questions answered. If you aren’t comfortable with the customer service, you shouldn’t give the company your business. Don’t settle for the phone robots, either. You should be able to speak with a person.
10: Red Flags
There are several things that should prompt immediate concern. Be suspicious if email messages contain errors in spelling, capitalization, punctuation and/or grammar. That’s a lack of professionalism, at minimum. It also may mean you’ve chanced across someone in a foreign country, beyond the reach of U.S. law enforcement.
Be wary if you’re offered a free period (like a year with no payments) before the loan must be repaid. Definitely beware if the lender says they don’t use credit checks and will lend money regardless of past financial problems.
Conclusion
Thanks for reading this post, I believe with this you’ll be able to identify and avoid them. if there’s anything you’ve to ask us you can drop a comment down here.