Loans

Speedy Cash Scams: What to Watch For

Fast cash may sound like the solution you need, especially if facing a financial emergency. However, things can get a little tricky when looking for loan options online and sometimes in person. There are all kinds of speedy cash scams out there and it can be difficult to spot if you don’t know what to look for. Continue reading to learn more about credit scams, so you can protect yourself. 

Guaranteed Approval 

One major red flag to look out for is guaranteed approval. No reputable lender ensures that a borrower will be approved, so most of the time, guaranteed approval means a shady lender. Many false lenders will guarantee approval as a way of phishing for your personal information or stealing money through your personal account. 

Look Out for Fake Companies Posing as Legitimate Ones

Something that fake lenders will do is pose as a legitimate lender or alter the name of a legitimate company a little bit to confuse you. If you ever need to confirm the legitimacy of a loan company/creditor who calls or emails, head online and find the contact information of the actual company and call or email their accounts department. With this confirmation, you can figure out whether the person trying to contact you was a scammer or not. 

Asking for Money in Advance

One of the most common cash scams you will find with loans is when a scammer asks for payment upfront. Many loans have origination fees, but they are paid after a contract is signed and don’t include roundabout payment methods. Here are the common strategies that scammers will use when asking for money (posing as a loan lender}: 

Asking for a Money Order or a Money Wire

A money order is something that you have to pay for before it gets sent. Many scammers will ask for this option because they don’t need much to pick it up, and once that money is sent, there is no way you can dispute it. Typical money order retailers they will ask for include Western Union and Walmart. Asking for a money wire is another common tactic. This is where money is sent directly from one bank account to another, and just like money order, their disputes are incredibly challenging, usually impossible. 

Requesting Money Through a Prepaid Card

Another way a fraudster may ask for money is via prepaid cards, usually Visas, Amex cards, or Mastercards. Once you load the cash and send the card, the money is theirs to use. No reputable lender should ask you to load up a prepaid debit card. 

Asking for a Check Deposit

One common scam used to get money is sending a fake check with a surplus of money. From here, a scammer will ask you to deposit the check but claim that because they sent you too much money, you need to send some back to them. But that check will bounce, leaving you without any funds and money paid to the scammer. 

Sending an Application or Documents Before You Apply

For many fake lenders getting your information is just as valuable as getting money. And so, many scammers will try to get your information by sending you loan documents to fill out. That way, they can access your sensitive personal details once you “submit your application”. Most loan applications require your name, address, birth date, and social security number, which can be used for all kinds of financial activity. 

Sending Unsolicited Phone Calls and Emails

Another way that scammers will try and get you to send information or money is by calling or emailing you about a loan or offer you never applied for. Most of the time, these scammers will pose as a collector or lender for an unpaid debt.

Offers That Sound Too Good To Be True

When a loan offer sounds too good to be true, it often is. Look out for things like guaranteed funds, 0% interest rates, a substantial loan amount, etc. When you see any of these types of claims, you should avoid applying for these types of loans as they are often scams. 

Threatening Phone Calls or Emails

One thing a legitimate company will not do is threaten you for outstanding debt. Many fake lenders will use threats to intimidate their victims by posing as debt collection specialists or companies. They may use phrases like “your last and final chance,” “having your wages confiscated,” or even go as far as saying they will show up at your doorstep. Don’t fall for it! A legitimate lender would not use threats of any kind, as it is unethical and can mean legal consequences for them. 

Can I Pursue Legal Action Against Fraud?

If you are scammed out of money or a victim of identity theft, you may be able to press legal charges. However, even with legal or criminal action, you may not be guaranteed your money back or your identity safe. Legal proceedings can be costly and time-consuming, so many people avoid the lawsuit route.

How To Protect Myself if I Am a Victim of Identity Theft?

Identity theft is a serious crime, and if you are a victim, it can throw your finances upside down. Here are some ways of protecting yourself if your identity is stolen:

  • Contact the Credit Reporting Agencies — Most scammers will try and use your personal information to access credit accounts. However, you can freeze your credit by contacting the 3 credit bureaus. With a credit freeze in place, scammers cannot open any new accounts.
  • File a Police Report — Filing a police report with your local county sheriff department/police station/law enforcement office etc., will accomplish a few things; it may help identify the person responsible. And it will help you prove identity theft when writing your dispute letters to creditors. 
  • Get a Copy of Each Credit Report — Checking your credit reports after identity theft is crucial. It will help you see the extent of damage a scammer has done to your credit and can give you a starting point of where to start fixing it. 
  • Freeze Your Bank Account — If a scammer has access to your bank account, you can contact your bank and ask them to freeze your account temporarily while you figure out the next steps. This can prevent any additional money from being lost. Replacing your debit card is easy, but things can get more complicated with a bank account. Some people even switch to a new bank account, which is definitely an option to consider. 
  • Opt-in for Text Message Security (2 Factor Authentication) for Your Financial Accounts — Once a scammer has your personal information, it can be easy for them to login into your financial accounts. One way to protect yourself is to set up two-factor authentication with your phone. That way, even with your passwords, only you can log into your accounts and access that information. 

What Loans Have the Most Scams?

Usually, bad credit loan options like a payday loan may have the most scams because they are often targeted at those who may have no other opportunity and because they have all the characteristics that speedy cash requires—an easy application and fast cash. The loan agreement for payday loans is pretty simple; you borrow funds for a few weeks and make the minimum payments until the loan is paid off, usually within two weeks. Because of this simplicity, many scammers may lean towards posing as payday loan organizations. You will find other common speedy cash fraud with personal loans, title loans, mortgages, and credit cards.