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Personal Loan Scams and Traps

Posted September 18th, 2010
by PersonalLoans.org Staff

Personal loans can be a good source of funding for a variety of legitimate reasons, but there are also a lot of scam artists out there. It’s important to be prudent with your personal information, and inform yourself about common tricks and outright scams that are designed to part you from your money without providing any service. Follow these steps to protect yourself.

  • Don’t respond to e-mail messages asking for your personal information online. Phishing scams often try to get victims to enter their bank account or credit card information, pin numbers, and passwords by tricking them into thinking they’ve already been hacked. Other rip-offs make people think it’s their bank that’s contacting them. Sending any private information through e-mail is ill-advised. Always contact your bank directly if you’re unsure whether the e-mail is legitimate.
  • If you are contacted by a finance company or other lender with a pre-approved offer of credit, be wary. Many disreputable lenders take advantage of low-income and elderly people by sending out offers of credit. They pack their loans with hidden fees and unfavorable terms, knowing the customers won’t read the fine print. The best rule of thumb is to avoid doing business with lenders that seek you out.
  • You should know the loan repayment terms up front, and not just rely on the word of your loan officer. If she’s telling you something different than what’s in black and white, run very fast in the other direction. No reputable lender would try to pull the wool over your eyes like this.
  • If you’ve been scammed once, maybe it will work again. At least that’s what the scammers are thinking. If you’ve been a victim of credit fraud or a phishing scam, be wary of callers who may try to convince you that you still owe money. These tactics often work on the elderly and people who aren’t familiar with credit, how to use it, and the laws that protect consumers. Don’t give them any information, and report any activity you suspect is fraudulent.

Whenever you’re signing up for personal loans, you need to protect your personal information. Don’t give out too much information until you know who you’re dealing with, and always look out for your credit. Getting into a bad deal on a personal loan now could have long-lasting consequences. Be sure you know what you’re getting into, and who you’re getting into it with.

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