How to Protect Yourself Against Online Loan Scams
2/1/2023
2 minute read
How to Protect Yourself Against Online Loan Scams
Getting a personal loan through an online lender may come with many benefits, including convenience and faster funding. However, online lending is also more likely to be plagued by scammers, especially during difficult economic times. According to the Federal Trade Commission (FTC), consumers were scammed out of almost $5.8 billion in 2021.
Watch out for the following signs of online loan scams:
Lack of information about the company offering the loan. If you can’t find out more about the company/lender after searching online, it could be a sign they are not legitimate.
The lending company is not registered to do business in your state. This is required by the FTC, so you should be able to find this information on the lender’s website.
The lender does not have a physical address or other contact information. You should also be able to verify the address to be sure it’s not fake.
Requests for personal information such as Social Security number, bank account numbers, or birthdate before you’re even involved in the application process.
Pushing for urgency. Scammers try to get borrowers to act fast and take out a loan, claiming the offer is going to end within a day or two. If you don’t have more time to accept an offer, it’s likely a scammer is trying to get you to act fast without doing research.
Requiring upfront fees before delivering funds or providing services. Scammers may ask you to wire money or pay with prepaid debit cards or gift cards.
Approval guarantee. Fraudulent lenders won’t check your credit score, history, or ability to repay a loan. There are legitimate lenders who make borrowing more accessible to those with bad credit, but they will ask about income, employment information, and more before making an offer.
Hidden/surprise fees. All fees for a loan should be stated clearly upfront or disclosed during the application process before anything is official.
The offer seems too good to be true. Suspect lenders who promise immediate loan forgiveness or that you’ll get an extremely low interest rate (especially if you have bad credit).
If you think you’re the victim of a loan scam, here’s what you can do:
Change your usernames and passwords.
Compile emails, screenshots and documents that will help you build a case against scammers.
Contact your bank about the issue so they know to watch for possible fraudulent activity.
Set up fraud alerts with a major credit bureau so your identity can be verified before new accounts are opened.
File complaints with the National Consumer League, your state attorney general and the FTC.
Report your concern to your local police department and the FBI’s Internet Crime Complaint Center.
Lastly, work with a lender you can trust. Lendmark has been serving the personal lending needs of our customers since 1996. Our experienced loan advisors can help you find the right loan for your needs. Just stop by your nearest branch or apply online.
