What is and How to Identify a Loan Scam
Do you ever get calls from other states on your smart phone? Have you ever answered any of them? Most of the time they’re nothing, but something has been on the rise lately that you should know about: Strangers calling to offer you an unsecured signature loan with a great APR.
Can you trust these types of callers? Are lenders actually doing background work and calling prospective clients?
Unfortunately, the answer is no to all the above.
Why are they bad? Hoes do they work?
Spammers get your money a variety of ways. One way is that they always require something to be prepaid in advance. This can be either interest or some other fee associated with the fake loan. When you prepay the fee or interest, they’ll then call you back after one or two business days asking for another fee that they ‘missed’ when putting you in their system. This can go on and on for any amount of time.
It sounds obvious to most people, but spammers often trick people by claiming to be a part of a reputable lending association or website. With just a little bit of chicanery, it doesn’t take much to fool and convince a person in financial need.
Do banks ever cold call?
No, it takes a lot of leg work to get qualified for a loan, and banks and lenders have enough traffic coming their way without ‘cold’ calling prospective clients. Even if your credit score and history are great, you have hoops to jump through. Banks aren’t going to do all the work for you.
Think about it: With reputable lenders you need to provide proof of citizenship, several years of taxes and financial documents, pay stubs, and so forth (not to mention the bank itself needs to do a full run of your credit history).
No bank would ever bypass these steps because every time they lend money it’s a risk to them. Would you lend $5,000 to a stranger?
Should you even talk them?
You won’t know who they are until they have talked for a few moments, and basic human etiquette requires you to say a few words well before you even know someone’s full intentions. You can engage in pleasantries but be careful what you say.
Many spammers are asking specific questions to get people to say ‘yes.’ Questions like, “Can you hear me?” or “Are you doing well today?” The danger is that when you say yes, they then have a recording of you giving assent, which can be used a variety of malicious ways. Whatever you do, don’t say yes to anything or anyone before you know who is calling. With a recording of you saying yes, these so called “lenders” can then have you agree to charges on your credit card account.
Is there anything you can do to stop them?
Yes, there are a few things.
- Don’t answer the phone if you don’t know who’s calling.
Let it go to voicemail. Most of the time, scammers won’t even bother leaving you any voicemails. They’d rather move on to the next target than waste their time leaving a message. - Put your number on the national do not call list.
Don’t expect a lot to come of this because many scammers operate abroad and won’t be prosecuted in their country for violating US laws. However, it will stop some scammers from calling you. - If you’re using a smart phone, install an anti-spammer app.
Yes, these exist and can save you a lot of headache when dealing with spammers. Apps such as TrueCaller and Robokiller won’t even let spammers’ phone calls get through to you.
It’s only going to get worse.
Tools that can be used against you get more powerful every day. One day soon A.I.s will be added to that list. Already A.I.s can model human speech perfectly (complete with pauses, hesitations, pitch changes and background noise). As soon as spammers get a hold of A.I. (and they will), people are going to be even more in danger. Start exercising caution today.
