The desperation, misery, and rising unemployment caused by the current financial crisis, have spawned a whole new growth industry.
Bad Credit Loan Scams
It’s a particularly horrible phenomenon, because the people that operate these scams are preying on those that most need help, and they don’t care if they put the last nail, in a family’s financial coffin.
People that are drowning under suffocating debt, and have poor credit are being bombarded with ads like these, and many similar ones.
Looking For A Loan Or Credit Card But Don’t Think You’ll Qualify?
Turned Down By A Bank Because Of Your Poor Credit History?
Get An Instant Loan. Guaranteed. No Credit Check And Low Interest!
A person that’s desperate for a loan is easily tempted by advertisements and websites like these, because they offer a simple and quick respite from misery.
It’s said however, that forewarned is forearmed;
So let’s Look At The Tip-Offs To Rip-Offs.
Just one of the following should cause you to raise your antennae, and more than one of them should send you looking for another lender.
1) If you get offered a loan over the phone.
Companies that do business by phone in the U.S. are forbidden by law to promise you a loan, and to ask you to pay for it before they deliver.
2) The Federal Trade Commission (FTC), which is a federal agency that investigates and eliminates unfair and deceptive trade practices says;
“If you’re asked to pay a fee for the promise of a loan or credit card, then you can almost count on the fact that you’re dealing with a scam artist”.
3) A lender who isn’t interested in your credit history.
A lender that says that he won’t check your credit score, should certainly make you suspicious. Why doesn’t he care?
Any advertisement that says things such as, “Bad credit? No problem” or “We don’t care about your past. You deserve a loan” or “Get money fast” or even “No hassle guaranteed”, more often than not indicates a scam.
4) A lender who uses a copy-cat names, and similar websites.
Crooks will often give their companies names that sound similar to well-known and well respected organizations, and they also create websites that look like the originals.
Always get a loan company’s phone number from the phone book, or directory assistance, and call to check if they are who they say they are.
Get a physical address too, because a company that advertises a PO Box as its address is definitely one that needs to be checked out with the appropriate authorities.
5) A lender who is not registered in your state.
Lenders and loan brokers are required by law to register in the states where they do business. In order to verify their registration, call your state Attorney General’s office, or your state’s Department of Banking or Financial Regulation.
6) A lender who asks you to wire money or to pay an individual.
Never make a payment directly to an individual for a credit card or loan, because no legitimate lender would ever request such a thing.
Hopefully the above information will help prevent you from getting ripped off, but please help others too.
If you encounter a company that’s doing any of the above, then please tip off the relevant authorities.
Where To Complain
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.
Finally – A Little Bit Of Advice That’s Not A Tip
If you have debt problems, then the very first thing that you should do is to contact your creditors, and attempt to resolve the problems, and the sooner the better.
If you’re unable to resolve the difficulties yourself, or you need some help doing it, then contact a credit counseling service.
There are nonprofit organizations in every state that counsel and educate people and families about debt problems, budgeting, and using credit wisely.
These services are often free, and if there is a charge, then it’s not likely to exceed $25.00 – and credit unions, universities, military bases, and housing authorities frequently offer low cost advice as well.
To learn more about dealing with debt, including how to select a credit counseling service, visit ftc.gov/credit.