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Loan scams

People who are rejected several loan applications are often targeted by tricksters offering an alternative. The victims get unsolicited emails (or a call) where they are asked to pay a refundable fee for it, but the caller may seek payment through wired transfer, iTunes vouchers or cryptocurrencies. 

The person who gets such an email is asked to reply immediately to the advert to secure the deal, and they are informed that the transfer of funds has been approved, regardless of their credit history. 

Further, they are asked to pay the upfront fee for insurance. Once the victim pays the fee, they may not get any message from the representative. 

How To Spot It?

The lenders' advert states, "if you are shopping and the banks have mistreated, you should check better options at the specific review site." The message guarantees approval of a loan fast without looking into the reviews. 

The client should always ask for the dealer's profile to find if they are legit (registered) or not.  Suppose you have never heard of the bank, and they are reaching out with an unbelievable deal. 

In that case, if there is no information about the company other than the website address and no reviews of the lenders at various platforms, you should escape it. 

  • Bogus lenders do not care about bad credit, and they offer no credit checks. Any authorised financial organisation cannot guarantee lending without checking the financial history of the client. 

  • They seek upfront payment where you are asked to pay for application or origination fee. Such charges are worded with legitimate terms like processing fee, transaction fee, or they may ask the victim to buy a prepaid card to pay. 

  • If they adopt pressure tactics where you are asked to make quick decisions or disclose personally identifiable information like bank account details, it indicates risks.  

  • Any legitimate firm will always provide a statement where they will inform how the fee is calculated, and they will mention the name of their legal partner; you can always check its name on the approved registers. 

  •  Always apply for loans through regulated organisations, compare the rates, and shop carefully to get the lowest interest rates. Always be careful of the lender who put pressure to buy their schemes.

Date Published: Feb 16, 2022

Types of fraud

A-Z of fraud

To help understand which fraud you've been affected by, we've categorised them into an alphabetical list.

What is fraud and cyber crime?

Cybercrimes can be of two types. First, it can be cyber dependent, where the fraudsters use online devices to convince the victim to accept their offers.

Advance fee fraud

If you are trying to get a loan for a house or a car, they ask to meet the provider to get the financing arrangement and pay the finder's fee in advance.

Corporate fraud

Corporate frauds can be complicated, committed either by the firm or an individual. Nevertheless, it mostly involves cheating where the employee or the firm.

Individual fraud

There are many types of individual frauds related to advance fees, investments, insurance brokers, bogus tradespeople, Ponzi schemes, pension liberation.

Online fraud

Hence the number of cases of online fraud is increasing each year, and most such cases include – account takeover, direct frauds, or scams related domain names.

Identity fraud and identity theft

The criminal uses the stolen identity of another person living or deceased to conduct unlawful activities like obtaining goods or services in another's name.
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