Consumers lose billions of dollars each year to scammers. These criminals know who to target. They focus on individuals in dire circumstances. However, any person might fall victim to a scam. To reduce the odds of this happening, keep the following things in mind.
Up-Front Fees
If you are getting a loan online and they ask for an upfront fee, choose another company to work with. Certain companies demand this fee, stating the loan will be approved once the fee is paid and the application is submitted. Often, these companies advertise that there is no credit check required or all applicants are approved.
When the borrower pays the fee and submits the application, the company never responds. It simply vanishes and the phone number no longer works. Sadly, not only do they get the person’s money, often they get their social security number. They then use this information to do more financial harm to the applicant.
Suspicious Activity
If a company sends a text or email saying they have seen suspicious activity on an account, don’t respond to the email. Contact the company directly and see if they sent the communication. Many scammers today use this technique in the hopes a person will respond and share personal information.
Once this information is shared, they use it for nefarious purposes. Never provide or confirm financial or personal information online when another party initiates the contact. If there is any doubt about a communication, it’s always best to reach out to the company directly.
State Registration
To protect consumers from fraudsters, the Federal Trade Commission makes lenders and loan brokers register in any state where they engage in business. Visit the lender’s website to learn which states it is registered in. If this information is not readily available, the lender or loan broker may not be legitimate.
However, it never hurts to contact the company and request this information. If the company provides a state registration, check with the appropriate parties to ensure the information is valid and accurate.
Student Loan Forgiveness
Countless individuals receive calls and communications every day from companies offering student loan forgiveness. These scammers call everyone, even those individuals who have never had a student loan. They are hoping to collect personal information that can be used for criminal purposes.
These scammers can be very aggressive when contacting consumers. They often ask for personal information and may demand payment for their help. Credible organizations will not request payment. Furthermore, they may ask the consumer to sign a power of attorney that allows the company to speak on their behalf. Avoid these companies, as they may be attempting to gain a person’s sensitive personal and financial data.
Unsolicited Offers
When a company contacts a consumer by mail, phone, or door-to-door to offer a loan, the consumer must be wary. The Telemarketing Sales Rule prohibits these types of communications. Only general advertisements may be sent to consumers through email.
A might use a legitimate company’s name to gain a person’s personal information. They can even make a phone call appear to be from a legitimate lender by switching out the name and number that appears on Caller ID.
Always contact the lender directly rather than accepting an unsolicited offer. Ask if the lender initiated this contact. They will happily provide this information if the offer is legitimate.
Anyone in need of a personal loan should do their research. Sadly, scammers take advantage of people every day, and it falls on the consumer to know which sources they should trust. With the help of these tips, a person can find a reputable lender while avoiding scammers.
