Shady Loan Scams

How to avoid getting hooked

At some time or another, you may have received a questionable letter in the mail or an email offering you a debt consolidation loan, mortgage, small business or student loan, or an over-the-top credit card offer. Common solicitations include statements like “Turned down by a bank because of bad credit?” and “Need a loan or credit card? No one ever turned down.” Offers that request an up-front fee on the loan are generally scams called advance-fee frauds. The promise of easy cash can sometimes overshadow sound judgment, so it is important to know how to protect yourself from loan scams:

  • Never pay up-front fees for a loan. It is illegal for companies conducting business by phone in the United States to ask you to pay for a loan before the transaction has been processed.
  • Never wire money or allow electronic access to your bank account as part of a loan application process. Loan scammers might ask you to send fees via wire transfer made payable to an individual instead of a business. They will request that you (the applicant) use a “password code” with the wire transfer payment. This allows scammers to hide their identities. After your money reaches its destination, you cannot get it back.
  • Advance-fee loans are frequently advertised in many media outlets, such as magazine and newspaper classified sections, cable television spots, radio, and direct mail. Just because the media outlet is known and trusted does not mean that the business placing this type of ad is legitimate.
  • A real lender will not guarantee that you will get a loan even before you apply or before your information has been checked. This is especially true if you have not established a credit history or if you have bad credit.
  • It may sound obvious, but never send a payment to an individual for a loan – only deal with and send money to companies and businesses, and then only after you have confirmed their legitimacy. Always verify the lender and its history with the Better Business Bureau, www.bbb.org.

Other commonsense fraud prevention tips:

  • Do not give out your personal information, such as your Social Security number, credit card, or credit union account details, to any businesses unfamiliar to you that contact you via email, phone, fax, or via Internet advertising, such as pop-up ads.
  • Beware of phony email links to bogus, look-alike websites that may appear legitimate. Generally, if you click on a link sent to you via email, you will be taken to a phony business website posing as a reputable organization. Then, you will be prompted to give personal information, such as your bank account number, Social Security number, name, and contact information. Do not take the bait. In the future, always type a website address directly into your browser. It is safer than clicking a link.

UCCU provides a safe/trusted place for anyone to get a good loan. Before looking elsewhere, discuss your needs with one of our Member Service Representative and learn the loan amount you qualify for and the loan’s terms. Remember, if an offer seems too good to be true, it probably is, and it could even be a scam. Visit us at any of our convenient eighteen UCCU branches to see what is the best type of loan for you.

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