Identity Theft

Protect Your Identity: Watch Out for Online Loan Scams

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Want to know an easy way to make yourself a prime target for identity theft or collection scams? Apply for a bad credit loan online. Once you’ve applied, your personal information can be used by or sold to anyone, anywhere in the world. This is National Protect Your Identity Week and avoiding online loan scams is one way to do that.

At Credit.com, we’ve received hundreds of complaints over the years from consumers who are being harassed by bogus debt collectors for debts they don’t owe, or who have sent hundreds or thousands of dollars to scammers in the hopes of getting loans they urgently need. In both cases, their personal information appears to have been compromised when they tried to get an emergency loan, cash advance loan, or even small business loan online.

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The firms that set up these websites know what they are doing. They often promise loans to those who have been turned down elsewhere. But if you fall for their pitch and apply, your personal data could end up in Pakistan, Russia or somewhere else. Sometimes that site will act as a “lead generator” and simply sell the information to other companies. At other times, the website will be a front for an advance fee loan company. You’ll be told you have been approved for a loan, but that you need to pay the first few monthly payments upfront, or send an “insurance” fee before the funds will be disbursed.

Either way, you lose.

Not all online loans are scams. After all, here at Credit.com, we help match consumers with credit cards, personal loans, and other financial products online. We take our responsibility for ensuring that they have a safe experience seriously. So I am not going to say, “Never apply for a loan online.” But sadly, the more desperate you are to get a loan, the more likely you are to be taken.

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So how do you check out an online loan site before you hand over your personal information?

Before you provide personal information to a website, look for signs that the site is secure: “https” in the URL, and a security certificate from a company like Verisign are examples of online security measures.

In a search engine, type in the name of the company + the word “complaints” to see what pops up. A few complaints here and there may be one thing. Lots of them are a red flag. You can do the same kind of search with the firm’s phone number.

Check out the domain name of the website on the whois database to find out when the website was started and by whom. If it’s a new site, be extra cautious and do more digging to find out if it’s legit.

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Research the address of the firm using google maps. If you see an empty lot, a residential neighborhood, a postal box type location, or something else that doesn’t look right, pass up the “opportunity” to apply. Remember, most of these companies use a U.S. address to make them look more authentic, but are in fact based overseas.

Don’t pay money upfront for a loan. Do not let one of these outfits talk you into giving them cash before you get the loan. And remember that Western Union is the favorite pick for these scammers to collect from you.

Have you been the victim of an online loan scam? Share your story here.

Image:  Alexskopje, Dreamstime®

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  • Roger

    Great article. There are many vultures out there trying to prey on desperate people. I think there are benefits to alternative lenders, for the same reason match.com is a legitimate alternative to finding dates. But anybody that charges a fee before getting you committed capital (at a reasonable rate) is not worth your time. Great point you made Gerri, good article.

  • jeannie barrett

    I went on several website to try to get a loan for $500-$1000 any amount really cause Christmas is coming and I have 2 children and I have cancer and cripling neoropathy. I am wheelchair bound and have been since 2006 . Well went to the websites and they would only reroute me to another one and so on and so on. Well I got a call Monday evening this man said is ur email address n said my right address n I said yes well he said that he had a paper with felony charges on me I said WTF! I have never been in trouble except for a speeding ticket. He said I will tell you but you have to be Quite untile I finish so he goes on to tell me 1st felony charge is money laundering 2nd charge theft of property I was so upset I didnt hear the 3rd I said what in the Hell are you talking about he said $459 was put in my account n now its gone and I stole it and said that he wud contact the local P.D. to come and pick me up n said have a nice time in jail . I as so stupid for even applied for a loan on line my lawyer said he would probably call n say if u pay this 459 you want go to jail. But he made some calls and found out it was a scam I was scared too deatht I was crying so hystericaly I called my mom n said will u come get me out of jail that’s how convincing he was so please don’t never give ur account number or ss# out or ur D.L.# they are heartless people out there and I am glad I closed my account n will not ever do that again .

    • Gerri Detweiler

      Wow, Jeannie. I am soo sorry to hear what happened to you. I can’t believe how quickly they did that to you! They sound heartless. Have you contacted the Salvation Army or other local charities to see if they can help with the holidays? Perhaps they can help so you don’t have to go into debt.

      Thanks so much for sharing this. Hopefully it will help others avoid what you’ve been through.

    • suzanne torres

      Oh my gosh thats what just happened to me

  • http://credit.com isabella

    OMG same thing almost exactly happened to me this am scared me crazy and i had a heart attack 2 years ago ..im still shaking theses guys are ruthless

    • http://credit.com isabella

      OMg same thing almost to a tra happened to me this am I had a heart attack 2 years ago and i thought i was going bto have another one

  • suzanne torres

    Oh my gosh I just got that phone call this morn should I be concerned?

  • prince

    Hi.
    I had a Problem in my business Loan & i had applied for a Online Loan. But that is asking for money to pay in his account. I Had send my all personal Details to him,
    Now i m not understand how to protect my personal Information. Can Any One Help can i protect for this issue

    • http://www.credit.com Gerri

      If you believe your information has been compromised by scammers, then I recommend you do a couple of things right away:

      1. Place a fraud alert on your credit reports.

      2. If you have any indication that fraud has been committed, file a police report and keep a copy.

      3. Close any bank accounts for which you have given them the account numbers and open new accounts. Let your financial institution know what happened so they can help you protect your accounts from fraudulent withdrawals.

  • JoAnn Sarow

    I applied for a loan withDarlin Ed0wards of Finance Loan Solutions. He always has upfront fees and has even gone so far as to try to fine me when something did not go right on the delivery. He stated that he had $125,000 in cash coming to me by a courier out of Chicago.He is now asking me for$3100 for a christmas loan for $200,000 and the $8000 that I have already given him will be returned in March as it is company procedure.
    He has told me that he is in love with me and that is total stupidity.
    I told him that I have turned him in and he does not care

  • thorn

    This website is really a walk-through for all of the info you wanted about this and didn’t know who to ask. I will definitely bookmark this page. Keep it up!

  • Clarissa Shockley

    Im so sorry to hear that.
    Just last week i had got a phone call and saying i was approved for a loan but i needed to pit 220 on a
    Money pk green dot card
    Thank god i didnt i google the # and it showed up other people saying they got
    Scam but the same people with the same #

  • amy

    How do I report this stuff I have spent over 1000 to find out I was being scam there ends up being two groups apparently I don’t know what to

  • amy

    I really need help how to report the phone numbers to be checked

  • sarah

    Hi I have recently been scammed by an online loan loan company, anyway yesterday they took my only £90. That I had to live on for the week, and I am a single mum with a 7yr old little boy, and now I have to live the whole week without any food for my little boy and myself. I sent numerous emails to them explaining my situation and asking them to refund my account, but they just said no they will not. So if anyone comes across a loan company online called she loans! Then please just do not apply with them at all.

  • sarah

    I’m sorry it came out wrong on my last message! The loan company is called sge loans! Not she loans! Doh!

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