It’s easy to become a victim of a loan or credit card scam. Even if you think you are being careful, you can fall prey to clever scammers. This can end up causing you a real headache, and issues can continue for several years after the scam takes place.
For this reason, when you are borrowing money or using credit cards, you should be aware of the potential scams that exist. If you have this knowledge you reduce the chances of identity fraud taking place and credit being applied for in your name. Here are some of the most common deceipts that you should look out for.
Fees to pay upfront
It’s not unusual for application fees to be attached to a loan. However, these fees should be completely transparent. They are also usually rolled into the overall cost of the loan. This means that the payments you make every month include everything that you owe.
You should never be asked to pay fees upfront, before you have received the loan service. Any lender that asks you to do this is not legitimate. You could end up paying money, and never receive the loan that you need.
Offers made by phone
It’s illegal to make a loan offer over the phone. This is why you should never engage with any lender who uses the phone to make an offer. All loan offers should be put in writing and all terms should be clearly explained. If you have any queries regarding the details of the offer, make sure they are addressed before you accept the loan.
Wire payments requested
You should never be asked to wire money to a lender, in respect of fees. Any fees that are applied to the loan are normally included in the monthly repayments that you make.
If a lender asks you to wire money to them, they are not likely to be reputable. You should avoid dealing with them and look elsewhere for the money you need.
Copying the name of legitimate lenders
One of the cleverest scams around involves fake lenders copying the name of legitimate companies. These helps them to seem as they are offering an honest service. You should always be wary of issues like this.
Some of these scammers use PO boxes which is usually a sign that there is an issue. It’s always a good idea to check potential lenders with the Better Business Bureau. Doing this helps to ensure that they are legitimate.
Being asked to update credit card details by clicking a link
It’s not just loans which present scammers with the opportunity to take advantage of people. There are also plenty of credit card scams around. One of the most common of these scams is being asked to update credit card details by clicking a link in an email.
If you receive this type of request, you can be sure that it’s fake. Your credit card issuer will never ask you to update details in this way. If you click on the link, and provide information, you enable the scammer to commit fraud. This could leave you with a difficult situation to deal with.
Promises to reduce interest rates
Another common credit card scam that you could fall prey to is the promise of reducing the interest rate that you are paying. There are legitimate ways of reducing credit card interest rates. Responding to a pre-recorded call, offering a reduction, is not one of them. These calls are normally from scammers who are simply looking for a way to get money from you.
To do this, the scammers will normally include a request to send money in order to get the service. If you do send any money, you will find that you are worse off financially and the service does not actually exist.
Credit repair promises
Some scammers promise that they can repair your credit. They may ask you to part with money in order to make this happen. These promises are illegal.
The only way to repair credit is to ensure that repayments are made on time and wise credit decisions are made. If you pay people money to repair your credit, all that happens is you become financially worse off.
Allegations of potential fraud
If you receive a call from someone saying there is potential fraud on your credit card account, it can be tempting to trust them and do exactly as they ask. However, by doing so, you could be opening the door to potential fraudulent action being taken.
This is because these scammers normally ask you to provide additional information in order to make sure that your account is secure. They usually already have some of your personal information which makes them sound legitimate. This is not the case. They are actually trying to get the additional information that they need in order to complete their fraudulent actions.
There is nothing wrong with obtaining credit, as long as you know you can afford the repayments without causing yourself financial difficulties.
However, you need to be careful that you do not fall foul of any of the loan and credit card scams that exist. If you do, it can be difficult to rectify issues. You can end up being significantly worse off financially. You can also have problems getting legitimate credit, until the problems are resolved. This can be a major concern if you encounter a large expense that you cannot afford to pay outright.
In order to prevent these issues from happening, you need to be aware of the scams that you could be subjected to. Having this knowledge means that you are better able to protect yourself. Never feel pressured into making decisions or providing information. It’s always better to double check that you are not being scammed. Reputable lenders will not mind you querying their intentions. They will understand that you are protecting your own finances and the privacy of your identity.