Tips for Identifying and Avoiding Loan Scams:
Imposter scams are considered as the primary culprit behind fraud loss. These are the scams involving people who pretend to be someone they are not with the ultimate goal of getting your money. There are loan scams that fall to this category.
What are Loan Scams?
Loan scams are actions meant to get your money without giving you a good service in exchange. This can include those fake loans where you are required to pay upfront without getting the funds for the loan in return. However, the term loan scams could also be used to refer to loan schemes that will try to lure you into a kind of financing that will not make you gain anything, typically through fraudulent ways. Keep reading to get Tips for Identifying and Avoiding Loan Scams.
Ways to identify Scams
It is not easy to come up with a complete list of the different loan scams, partly because fraudsters constantly come up with new ones. But to help you identify loan scams, there are a few signs you should watch out for:
- Unsecured websites
Legit lenders always use secure websites. Make sure that the website URL starts with HTTPS. Be extra cautious if it is only HTTP and avoid entering any personal information here.
- Unsolicited offers
Although most credit cards and loan companies that send legit unsolicited offers via mail, you have to be extra careful with how you react to them. Always work only with well-respected and known lenders at all times.
- Advance fees
When it comes to loans, it is always a red flag if you are required to pay a fee upfront. If lenders ask you to pay a processing fee or application fee upfront, it is best to run away as soon as possible.
- Not interested in credit history
Some lenders don’t go through your credit history yet they base loans on the collateral or income you have. However, even in legitimate cases, it still pays to be wary and check the fine print. Read this article about three main types of credit.
Tips to Avoid Loan Scams
Below are a few tips to remember to ensure that you don’t become a victim of loan scams:
- Don’t trust anyone who approaches you first. Legit lenders won’t call you without you calling them first. Many people that become a victim of loan scams are those that are directly contacted by the scammer via email, text, phone call, or personally knocking at their door.
- Watch out for the fraudsters’ language tricks. There are times when scammers will lure you to trust them with the use of details about yourself for them to sound legitimate that will commend the victim to be aware of the security risks once they become skeptical. These people will also use high pressure selling techniques between seemingly friendly conversations.
- Ask yourself if it is too good to be true. Fraudsters use loan offers that sound too good to be true to lure victims to fall for their acts. Always question everything.
- Do thorough checking. It always pays to be extra cautious. Check the website of the lender to see if there are contact details and registration number. Search the name of the lender to see what others have to say about the company.