Introduction to Loan Scams
Advance Fee Fraud loan scams target some of the most vunerable members of society, those who for whatever reason are unable to get a loan from their bank or other mainstream lenders. The scammers will often offer guaranteed loans ranging from a few thousand to many millions of dollars (or whatever currency they are quoting) at unbelievably low rates of interest. Anyone who applies for a loan from these cockroaches will find themselves asked for a multitude of fees and payments and also open themselves to identity fraud.
The initial approach
The initial contact by a loan scammer ranges from simple one-line emails mass-mailed to thousands of individuals on so-scalled “sucker lists”, to sophisticated and professional looking websites set up to offer the loans and advertised through social media such as Facebook, LinkedIn, Craigslist and other classifieds sites.
Summary of the Scam
Loans Scams will usually start off by asking the victim to provide various details about themselves, together with a copy of their ID. Often, the scammers are just asking for this to appear legitimate, but there is a chance that they may be requesting information that they can use for identity theft later on.
Once the victim has provided all of the details, the scammers will provide the victim with an illustration of the costs of their loan. This could just be in an email or may be a professional looking document with spaces for the victim to sign and return. Either way, the result will be the same, the scammer will ask the victim to make some sort of upfront payment. It may be expalined as insurance for the loan, a processing or documentation fee or even a deposit to show seriousness.
If the victim pays the first fee, then they will be asked for a multitude of fees until they eather realise that they are being scammed or are unable to pay any more (scammers will often persuade victims to borrow from relatives or even steal to pay their made up fees).
The recovery scam
Victims of any scams are open to recovery scams, where the original scammer (or other scammers who have purchased their details) will contact them claiming to be able to get their money back for them. These scammers will often claim to be from the FBI or other law enforcement agencies. In each case, the outcome will be the same, requests for yet more fees or payments to enable to return of the money that was stolen originally.
You can read our Loan Scam Blog Articles for regular loan scam alerts, detailing scam emails and fake websites that we are aware of. In addition, take time to read the articles below to further educate yourself on loan scams: