Personal Loan Frauds
If you need revenue for various personal requirements, personal loans are a great solution for your issues. You can secure loans from several institutions including banks, loan establishments, private agencies or online lenders. However, what is significant is that you should be aware of the possibility of being swindled in a personal loan scam and know how to prevent such situations. Personal loan scams were ranked at the number 5 spot in the US in 2000. it is estimated that the average loss per person in such scams was $464. Consequently, the Federal government tries its best to increase public awareness regarding such scams.
An advance payment for a loan is the commonest method of swindling people.
Almost all victims of such scams don’t report such frauds because
they feel embarrassed to have been taken in so easily by a fraudster. They
also feel anger at being duped. These people were in need of money quite
obviously, or they would not have applied for a loan at all. Now they not
only don’t have a loan, but have also lost the money they had in the
process. Many who actually report the scam feel frustration because more
often than not the swindlers elude capture and they do not recover their
lost money. It is however important that you report such frauds asking for
advance payments for
personal loans. If not reported, they can continue to prey on other
hapless victims.
Such advance fee scams for personal loans work well on people desperate to secure loans, on people who are not well educated and on people who do not have a good credit rating. Over fifty percent of all victims of such scams are below 30 years of age. The potential creditor informs the applicants that their situation can be addressed at the cost of a processing fee. These fees may be to the tune of hundreds of dollars. With the technology freely available, such fraudsters may even have genuine looking websites and toll-free 1-800 numbers. They may even send such official sounding letters that you will not consider them fake for even a moment.
Stories told by victims of personal loan scams involving advance fees are heart-rending. One story is about a woman who lost and was about to lose her home as well. She had found another employment and needed the personal loan for her rent so that she wouldn’t be evicted. The processing fees charged by the lender were equal to almost her whole pay check so that her loan application could be guaranteed eligibility. Understandably, she was extremely upset when she discovered that the lender had simply swindled her and taken off with her money.
In order to protect yourself against such scams, you should be extremely judicious about choosing lenders to deal with. You must ensure that the agency is a reputable one. Also, if they are an online establishment, check up on them in the Better Business Bureau. You should enter the name of the firm exactly as it appears in their listing. One of the common practices of such fraudulent businesses is to list a name similar to that of a reputable company familiar to the borrower.
For people who have no established credit record or have poor credit histories, you should never believe in claims that sound too good to be real, because it is quite likely that they aren’t real. You may have to cough up higher interest rates with low credit, but you should never ever agree to pay money upfront for a loan application. Many scammers will call the advance payment a first month payment or even high risk deposits. However, applicant need to know that there is no such fee involved.
Lenders are obliged to allow the borrower access to the money for a week at least before they can ask for a payment of any sort. Check on the legitimacy of the fees that a lender asks of you with Federal Trade Commission. In case you are in dire financial conditions you can even take counseling from any good non-profit credit counseling serviceinstead of going to a lender.