Be careful where you put your personal and banking information online. Your BBB often receives complaints from victims of advance fee loan scams.
They basically go this way: A “lender” calls to say the consumer qualifies for a big loan; the consumer agrees; the caller says some kind of fee is required for the loan to go through (or “the first loan payment”), and convinces the consumer to send payment with a pre-paid debit card; the loan never arrives; the scammer either tries to get another “fee” or simply hangs up.
Sometimes advance fee loan scammers will take money straight out of your bank account–if you tell them how.
When I talk to victims, I invariably learn that before they received the fake loan offer, they had been hunting loan offers online and filled out one or more online forms with all their banking information. Which is how the bad guys found them.
Online lenders and loan brokers might not be the ones who rip you off, but they can and do sell your information to people who will.
I recently spoke to a man from Oklahoma who lost over $400 to an advance fee loan scam. Sure enough, he had previously visited a website for an online broker and filled out a form with his banking info. It seemed safe, because he had seen a TV ad for the company, with a celebrity spokesman.
Not long after, he got a call from a lender who claimed to be based in Tyler, Texas, but who called using an Austin, Texas phone number with a (512) area code. (Turns out they were impersonating an actual payday loan outfit that is located in Tyler.) At first, he didn’t realize the connection between the call and the form he had filled out.
“They called me and said I qualified for a $10,000 loan,” he said. “The caller had an accent that sounded like she might be from India or Bangladesh. She said I had great credit and her company was offering me a loan from a government-backed lender. ‘Jessica’ said I should prepare to make my first payment.
“She said they wouldn’t take anything out, they just wanted to make sure it’s there. She wanted the last four digits of my bank account to verify. Then they took money out of my bank account over a three-day period. First a $150 payment, then a $263 payment. They said I would receive the loan payment through Moneygram.”
The scammers didn’t need all of his banking info–they already had it because of the form he had filled out.
Once he realized he’d been ripped off, the man contacted his bank, filed a complaint with the Internet Crime Complaint Center (IC3) and reported it to BBB. But there’s little chance he’ll get his money back. “It’s tough,” he said. “I have health problems, and I need the money for my kid’s spinal surgery.”
BBB offers the following advice when looking for a personal loan:
- Don’t do business with someone who calls with a loan offer you never asked for. Financial institutions don’t work that way. You have to apply and be approved for credit.
- Don’t trust someone who says you’re “guaranteed” a loan and asks for money in advance for insurance or other fees. They are operating illegally.
- Beware of applying for a loan through an unfamiliar website. The application could be run by a scammer who will either take your money directly or sell your information to other scammers.
- Don’t do business with someone who cannot give you an address you can confirm as legitimate.
- Carefully read any contract documents and make sure you understand all requirements before you enter any loan agreement.
- Don’t trust a website or loan document just because it “looks official.” Sophisticated, official-documents and websites are easy to copy or fake. Just because a business looks legitimate, doesn’t mean it is.