How To Avoid Fake Lenders | Business

Special to the town crier

The BBB Scam Tracker receives reports of scammers posing as legitimate loan providers, according to a Better Business Bureau press release published this month.

Fake lenders guarantee a quick loan with no upfront costs. But victims who provide their banking information to scammers are left in the dark.

How the scam works

You receive an email announcing a secured loan. The email displays a logo and contact information for what appears to be a legitimate loan company. Before making the offer, you research the company online to determine if you can trust it. You find that the name and contact details match a legitimate business, so you proceed with the loan.

Once you have accepted the loan, the “lender” takes your personal banking information and deposits the loan into your account by check. Then, the “lender” asks you to take out insurance for the loan before the check is officially cashed. Unfortunately, the loan check turns out to be a fake, which victims often don’t realize until after they’ve paid the “insurance.” One victim told the BBB: “The money will be available the next day, but then it will be rejected by your bank three days later.”

These scammers know that consumers are becoming more aware of phishing attempts, so they use the identity of a company that can easily be verified online. This allows them to gain the target’s trust and gain access to their bank account.

How to avoid the scam

To protect yourself from fake loan offers:

• Avoid unsolicited loan offers. Scammers use quick money offers to lure you in – don’t fall for the trap. Whether they contact you by phone, email or text or send you loan offers in the mail, approach all unsolicited offers of money with caution.

• Expect a credit check. These scams often prey on people who cannot easily qualify for a loan. No legitimate lender will give you a loan without doing a credit check.

• Make sure the business contact information matches the email sender information. Brand IDs can easily be copied and included in the body of an email, so the most important piece of information a consumer should verify is the sender’s email address. The domain of the email address usually matches the domain of the official website and should be free of random letters or numbers.

• Research lenders before accepting an offer. When dealing with an unknown company, don’t just verify that it’s legitimate by researching its name online, or you might miss some surprising information. Check ratings and reviews to see what others are saying and look for a BBB business profile.

The office warns people to be cautious and watch out for “secured” loans with upfront fees. BBB also advises consumers to find trusted lenders in their area by visiting BBB.org/research.

Sara R. Cicero