Get Smart About Scams – Loan Scams

Intro – What is the scam?

Imagine this: one day, you’re coming home from work when your cell phone rings. The number doesn’t look familiar, so you let it go to voicemail. Later, when you listen to the voicemail, it’s someone telling you that they have exciting news: you’re pre-approved for a large personal loan at an exceptionally low rate, and they want you to call back ASAP because the offer expires in 12 hours! Maybe you’ve been struggling with debt or maybe you’ve been considering taking out a loan for a personal project. This sounds like an amazing deal. Little do you know, it’s a scammer looking to steal your money and even your identity.

Red flags to look out for.

What are some of the red flags to look out for to identify a loan scammer?

1. They reach out to you, instead of you initiating the contact.
2. They claim you’re pre-approved for a large loan at an exceptionally low rate, guaranteed, no strings attached, and no credit check required. They may try to entice you by noting this is a great way to rebuild or improve your credit score.
3. When you ask for verification and credential information, such as where they work, there are inconsistencies or there is mismatching information that doesn’t check out.
4. Once you’ve begun the process, the scammer may ask for an upfront fee to cover “insurance,” “processing” or “collateral.” They may also ask for payment in an unusual currency such as gift cards or cryptocurrency.
5. They ask for sensitive personal data, like your social security number or bank account credentials, to “verify” your identity. They may also ask for your bank credentials with the excuse of “depositing” the loan into your account.
6. Sometimes, they will deposit a fake check into your account and will urgently ask you to pay it back in gift cards or via a wire transfer before your financial realizes the check is fraudulent.

Common questions that we receive regarding this scam

How can I know that a lender is legitimate?

All real lenders are registered with the state they do business in, and you will be able to look them up online. The best way to confirm the legitimacy of a lender is to ask them for their name, NMLS license number, and—in Wisconsin—look them up at dfi.wi.gov under “Financial Services” and then “Licensed Financial Services Licensee Search.” If the person stumbles, makes excuses, or they give you a license number that doesn’t check out, hang up and block their number.

What should I do if I am asked to pay a fee on a loan?

Hang up immediately and block the number. It is extremely likely that they’re a scammer, and you should probably look elsewhere for a loan. Legitimate lenders don’t usually charge those types of fees. Remember that no lender is going to ask you to pay a fee with gift cards or cryptocurrency, so that would be an immediate clue that this phone call may not be what it seems.

What should I do if I gave the scammer money or my personal information?

The first thing you need to do is immediately cease contact with the fraudster and block them. Get in touch with the financial institution of the account you used to send money and let them know what happened. While you may not get your money back, your financial can set up safeguards to protect your account from additional fraud. Finally, file a police report if financial loss or ID theft has occurred.

Outro

At Educators Credit Union, we’re committed to ensuring the safety of our members’ accounts. If you suspect you may have fallen victim to fraud, we are here to assist our members every step of the way. Please give us a call at 262.886.5900. Take care and stay safe. Insured by NCUA. Membership eligibility required.