“Discover ways to spot loan scams to avoid fraudsters and scammers to con you by pledging to grant you a loan.”
One of the consequences of having bad credit is that it becomes hard to borrow money that too when you are in need of funds and don’t have the leisure of going to a bank. The favourable option is to locate alternative lending organizations. While lending companies can be helpful during these times, there are also several fraudulent firms in the credit market and these fraudsters tend to target people who need a loan quickly.
Everyone wants to protect themselves from being stormed too much or getting their personal information stolen. Look for a verifiable company when you begin your search. FCA affiliated companies are your best options. When you meet a lender, watch for warning signs of a fraud. A fraudulent lender may demand money upfront or may ask for personal information instantly. When you begin taking steps to secure a loan, be careful. Read over paperwork immediately. If you believe you are being scammed, report it to the officials or to the financial regulator (FCA).
Loan Scam Signs
4 signs that the loan you’re being granted is a scam
1: You’re contacted out of the blue
First of all, if someone reaches you out of blue, that doesn’t mean they’re trying to scam you. However, it also doesn’t suggest you should not proceed with caution. Some recognized companies might reach customers out of blue. To make sure that you’re not being set up for a loan scam, ask the company some details and also where they received your details from. If they are legitimate, they must have primary details like your address and the loan amount. If you still don’t feel convinced, then hang up the call and directly communicate with the company as they always keep accounts of contacting the customers.
2: Asked for upfront fees
Another sign of a loan fraud is being asked to send upfront payment before getting the loan. The lenders might disguise these as application fees or document fees. But you must always think that you’re being asked to send money in order to be loaned money. Also, legitimate lenders always disclose all their charges.
3: Their website isn’t secure
If you’re transferred to the loan company’s website, make sure you look for https:// when you visit a website. It is because the ‘s’ after HTTP stands for security and means that the site has passed security tests and will keep your data and information safe. The company has to pay for these checks too, so the ‘s’ is separately verified and reliable. If there’s no ‘s’, in the websites link then, don’t trust them as it can be a scam.
4: No interest in your credit history
Legitimate lenders evaluate a person’s creditworthiness BEFORE delivering a loan and if any lenders consent to grant you a loan without evaluations then never listen to claims like “Bad credit? No credit? No problem!” “No credit check loans”? There’s quite surely a problem.
Tips to avoid loan scams
Many loans fraudulent will set up websites or render articles and reviews that may outline credits like personal loan, Payday Loan, short-term loans, etc., that they may offer. They ordinarily offer a quick and easy credit approval process with a low-interest rate. Bad credit isn’t a concern for them either. Scammers tend to offer you credits that you may despairingly need like a personal loan for bad credits or payday loans for bad credits because they know that people lack loan approvals because of their credit conditions in the moment of crisis.
#1: Limit your search for loans to affiliated loan websites
If you are searching for a moneylender then, you must look for an FCA regulated lender, as they are more secured and help you keep safe from loan scams and frauds.
#2: Research any lender you are considering
There are a lot of fraudulent lenders in the lending market because of which researching with extreme scepticism are vital to be safe from such scams. This also helps you to understand more about the organization and lender from where you are considering acquiring a loan.
#3: Don’t release personal information over phone or email
A company that asks for personal information up front is sceptical. A legitimate lender will understand the fact that most people are uncomfortable presenting personal information over the phone or via email, and they should not pressure the borrowers to do so. Hence, if any lender seems so firm to obtain your personal information then, they are expected to be suspected.
If You’ve Been Scammed
If you’ve ever been a victim of loan scam, reach out to your local law enforcement as soon as possible. You should also notify your state Attorney General, the Feds if the company was from some another state or country, and the Federal Trade Commission. Report to the Financial Conduct Authority (FCA) or reach out to The Financial Ombudsman Service.