How To Protect Yourself from Loan Scams

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Loan scam is increasingly becoming a popular option among scammers all around the world. Nigeria isn’t left out of this mess. Loan scams basically prey on people interested in getting quick solutions to their financial problems. However, anyone could fall victim to loan scams due to the evolving nature of such scams. As a responsible lender concerned with protecting our esteemed customers, it is pertinent for us to set certain things straight pertaining to loan scams and how people can protect themselves from loan scams. In this article, we will look at common methods devise by loan scammers and how best you can protect yourself from unscrupulous scammers.

Common Loan Scams

  1. Advance fee fraud: If you’re familiar with the gimmicks of loan scams, you surely would have heard of this type of loan scam. In advance fee fraud, you’re required to pay a fee before your loan application is processed. To advance this tactic, the scammer presents you with a too-good-to-be-true offer that makes you feel the upfront processing fee is inconsequential. Standard loan procedures frown at the payment of an advance fee in whatever form. When necessary, customers are rather requested to pay the processing fee as part of the loan amount or pay it separately after the disbursement of the loan funds.
  2. Clone firms: This is another pattern common among loan scammers to perpetuate their fraudulent acts. This basically involves using the brand identity or name of a legitimate lender with the intention to scam unsuspecting customers. These scammers either impersonate a genuine lender or parade themselves as one of its agents. Once a victim is drawn in unsuspectingly, these unscrupulous scammers attempt to get essential personal information from the person to be able to further their fraud. 
  3. Phishing and smishing: Phishing (through email) and smishing (through SMS) are “glamorous offers” scammers send to their potential prey in the form of attracting them to patronize their brands. These messages tend to contain links that are used to extract as much personal and financial information from victims as possible. This information is used to hack into victims’ accounts or apply for loans and have the funds disbursed into another account.

Tips for protecting yourself from loan scams

  1. Avoid lenders not interested in your credit history: No legitimate lender would lend you money without first taking a look at your credit history by getting reports directly from your main financial service provider. This credit check is done to give the lender a clue on your creditworthiness and your ability to pay back disbursed loans in full and on time. Due to shady intentions, fraudulent companies are not interested in conducting any background on your credit profile. They would, in fact, prefer to target high-risk loan borrowers who are desperate about securing loans.
  2. Avoid lenders that request for your ATM details: Any lender that requires your ATM details for whatever reason is most likely intending to scam you. Giving out your debit card details in the name of processing a loan application will expose you to identity thieves who are skilled in carting away your funds.
  3. Look out for unprofessional marketing: Some lenders are known to call or write random customers. This is largely common among loan scammers. Legitimate lenders typically advertise their offers online or through mass media. If you get a loan offer through random phone calls or text messages, please be on guard immediately. Usually, such offers come with the demand that you pay an upfront fee before the loan can be delivered to you.
  4. Review loan websites before applying for a loan: If you’re visiting a lender’s site, always look out for a padlock symbol on any page on the website where you’re requested to submit personal details. Be also mindful of a URL that starts with “http” rather than “https.” A lack of any of these two measures means the particular lender doesn’t care about the integrity of the website and is interested in stealing your personal information to perpetrate fraud. Both safety measures indicate that you’re dealing with a reputable loan company and make it difficult for identity thieves to gain access to your persona and financial details.
  5. Deal only with a company with a physical address: Although it’s understandable that most businesses are increasingly taking their businesses online, it’s still weird for a firm not to have at least one physical location. A physical address gives room for investigation, which most illegitimate lenders would always want to avoid. It is always a great idea to physically confirm any address listed by the lender before proceeding to have any dealings with such a firm. 
  6. Be wary of rushed deadlines: Most loan scams come with a short expiration date to apply for a loan. The idea is to pressure you into making a rash decision that aligns with their evil intentions.
  7. Avoid any lender that guarantees approval: Loan application approval involves a lot of factors, including credit score, income, location, etc. The whole idea of having these many factors to consider is to ensure that only worthy applicants are given loans. As such, any lender that guarantees approval of your loan application, even before you apply, is most likely trying to scam you.

Keeping these red flags in mind lets you avoid the painful consequence of being scammed of your money in the process of attempting to secure loans. You can also join the fight against loan scams by reporting any lender you suspect to be involved in loan scams to law enforcement agencies nearest to you. We would also appreciate it if you can get across to our team peradventure you come across any lender that clones any one of KiaKia’s brand identities to market its lending services.

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