What You Need to know Before Applying for Advance Fee Loans
You will find that some companies promise you a loan or credit card without taking your credit history into consideration. In order to get started, they are going to ask you to pay a “processing” fee or some other type of fee. There is a possible scam going on here. Find out what the signs of these scams are so that you can avoid them in the future.
What is an advance fee loan scam?
Are you in need of borrowing money to pay for car repairs, consolidate credit card debt, or pay off your mortgage? In cash advance fee loan scams, scammers claim to be able to get you a loan, credit card, or access to credit by asking for an advance fee. Alternatively, they will tell you that they will connect you with a lender who will almost certainly be able to get you those things, and without taking into account your credit history.
There is, however, a condition that you must pay in advance before they will accept your payment. The scammer may say the money is to pay a “processing” fee, “insurance,” “application,” or something else. The truth is that it is a lie. There is no loan or lender. As a result, if you pay the scammer, he will disappear with the money he has taken from you.
In advance-fee loan scams, the perpetrators usually target people who either have poor or bad credit, or are having difficulty getting a loan for any number of reasons. In order to offer these supposedly convenient deals, scammers post ads on the Internet, or contact people by phone. The scammers buy lists of the names of people who have searched for or applied for payday loans or other loans online in order to prey on them.
This is what you need to know:
- There is no way a legitimate lender will offer you a loan or any type of credit without knowing your credit history, nor will they ask you to pay them before they give you the loan.
- It is possible for real lenders to ask you to pay an application fee or an appraisal fee before they will consider your loan application for approval.
- The truth is, no one who operates legitimately will ever tell you that paying a fee will guarantee you a loan.
Warning Signs of an Advance Fee Loan Scam
The truth is, no one who operates legitimately will ever tell you that paying a fee will guarantee you a loan.
- The scammers post ads on the internet that say that you will be able to get credit regardless of your credit history. In some cases, they may say things like, “Do you have any credit problems?”. There is no problem,” the bank or other legitimate lender will not guarantee or promise you a loan or credit before you apply, such as “no hassle: guaranteed”, or “we don’t care about your past, you deserve a loan!” Before making a firm credit offer, they will consider whether you are able to repay the loan before making a firm offer. They will first review your credit report and confirm the information on your application.
- The scammers don’t disclose the charges associated with the loan before you apply for it. It is possible for fraudulent lenders to claim that they have already approved you for a loan. However, when you ask for the money, they tell you that you will have to pay a fee before you can get it. There is a scam going on here. It is a good sign if the lender wants to charge you an upfront fee before you can get the loan, especially if they tell you that the fee is for “insurance,” “processing,” or simply “paperwork.”.
- There are scammers who call to offer loans or other forms of credit to unsuspecting individuals. There is, however, a law that says telemarketers cannot promise you a loan or other form of credit and then ask you to pay a fee before they give you the loan. In accordance with the Telemarketing Sales Rule, this is the case.
Is there any doubt in your mind that the lender you are talking to is a legitimate one? You can protect yourself from scammers by following the steps below.
- It is important to find out if the lender is registered in the state in which you live. There is a requirement for providers to register with the state in which they operate. You can find out if a provider is registered with your state’s attorney general’s office, or with your state’s banking or financial services regulator, by contacting them directly.
- Do a search on the internet. Using a search engine, you can enter the company’s name along with words like “review”, “complaint”, or “scam”; if your search is in english, you can add words like “comment” or “scam”. In addition, you can also search for phone numbers and see if other people have reported those numbers in connection with scams by entering the numbers into the search engine.
- If you receive pre-recorded robocalls, you should hang up the phone. If you answer the phone and hear a recording of a sales pitch, hang up the phone and report the call to the Federal Trade Commission (FTC). It is illegal to make these calls. There is no need to press 1, 2 or any other number if you want to have your name removed from a call list or if you want to speak to someone. By doing so, you will only receive more calls as a result of doing so.
- You shouldn’t pay for a promise that you can’t keep. Whenever you are asked to pay someone up front in exchange for a credit card, a loan offer, debt relief, mortgage assistance, or a job, turn around and walk away from that person. No legitimate trader will ever ask you to pay for a promise that they have made to you.
- In order to deal with your debts, you should seek professional assistance. There may be more options available to you than you think. In every state, nonprofit organizations are available that offer credit counseling services, and they often provide these services for free or at a reduced cost, depending on the state. Take a look at other possible options to help you deal with your debts in order to find out more about them.
What to do if you paid a scammer
In many cases, scammers will ask you to use payment methods that will make it almost impossible for you to get your money back. It is important to act as soon as possible regardless of how you paid a scammer.
Report Advance Fee Loan Scams
You can report an advance fee loan scam to the Federal Trade Commission if you have lost money in such a scam or if you have any information about the company or scammer who called you. Reporting these opportunistic scammers will help law enforcement intervene to stop them and alert others in your community to the scams that are happening.