Recognizing Credit Loan Scams

There's a New Wave of Scammers Targeting VA Home Loans | Military.com

If you have below average or poor credit, there are people out to get you. Unscrupulous scammers know that people with bad credit often need loans and use the opportunity to extract both money and personal information.

How do these kinds of scams work and how can you avoid them? Let’s take a look.

How a Credit Loan Scam Works

The scammer first comes into contact with you via email, phone or through a website.

Usually they have some sort of promise where they guarantee that you’ll be approved for a loan, no matter what your credit looks like.

That should be your first red flag – no real lender guarantees loans without seeing your credit score and profile-.

They’ll then ask for your personal information, including social insurance number, address, birth date, in order to process your loan.

Finally, they’ll usually ask for an “advance fee” which needs to be paid in order to process your loan.

Once the fee is paid, no real money is ever wired to your account. The fee is forfeit, but the scam doesn’t end there.

Your personal information is often then sold to third parties, who in turn use it to write bad checks, open unauthorized credit card accounts or commit all kinds of other fraudulent activities.

In other words, falling for one of these scams will not only cost you money, but possibly result in a stolen identity.

How to Recognize and Avoid These Scams

The first step to recognizing a scammer is to always, always research the lender before giving any personal information.

Use the Better Business Bureau’s website to look up any business you’re considering. If you see any scam reports, avoid it. Also look them up on RipoffReport.

Never pay upfront for a loan of any sort. That applies for personal loans, bad credit loans and payday loans. In the USA and in Canada, it’s illegal for lenders to ask for a fee upfront, so if they do you know you’re dealing with a scammer.

Finally, only work with websites you trust and know. Never do business with a company you’ve never heard of, especially if they reached out to you first via email. Real lenders will never, ever send out unsolicited emails, or chase after you to offer you a loan.

Final Word

You now know how these scammers work, as well as a few tell-tale signs that’ll allow you to spot these scams a mile away.

With a bit of background information and a careful mentality, you can avoid getting scammed.

1 Comment

  1. Good post. I learn something new and challenging on sites I stumbleupon on a daily basis. It will always be helpful to read through articles from other writers and practice a little something from other websites.

    Like

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