Avoiding Online Loan Crooks
The Federal Trade Commission is determined to prevent Americans from being stung by online loan scams. They recently conducted an interesting experiment which involved them setting up a dummy website purporting to be a loan company called ‘Esteemed Lending Services’. Those who clicked on the website were redirected to a page which said ‘You could have been scammed’. It was an innovative way to drive home the point that thousands of people get scammed when looking for an online loan each year. Below are some ‘red flags’ that will hopefully set off your alarm bells when looking for a suitable lender.
Not Interested In Your Credit History
If you’ve ever applied for a bank loan, your credit history is considered to be one of the most important background checks made by any loan company. Those with a low credit score will almost certainly be rejected. Applying for a bad credit loan is one of the easiest ways to be scammed online. Once you have applied, your personal details will be sold to third parties and you may well be tracked by fake debt collectors. Thousands of people are scammed and pay money for debts they don’t actually owe. Lenders that claim they are uninterested in your credit history are to be avoided at all costs. It should be noted that payday lenders don’t worry about credit scores either but such loans come with incredibly high interest rates.
Every legitimate lender clearly displays their fees, terms and conditions. They are legally obliged to be as forthcoming with their conditions as possible. All fees are calculated based on the amount you borrow with these fees paid to the lender after the loan is approved and paid. Never sign any contract you don’t understand and carefully read the small print.
This is another sure-fire way to uncover a scam company. Fake companies will call you and promise loans. Nothing unusual about that you might say. However, these scammers will ask you to pay the fees before giving you loan. What kind of an organization asks you to pay money first in order to receive it? Besides, this practice is totally illegal in the United States.
They say that imitation is the sincerest form of flattery. Scam companies are taking this to the next level by trading with names that sound remarkably similar to respected companies, right down to the company logo. Fake companies will also have slick websites that are high on presentation but low on information. Don’t fall for their style; seek cold hard evidence that they are legitimate. If they are ripping off a well known brand name, you can be sure they are fake.
All lenders must be registered in the state where they do business. Although checking a company’s registration will not guarantee a loan you’ll be happy with, it should help you uncover most of the criminals.