Are you looking for a loan online? How to spot scams
PHOENIX – So you’re out of work and you need some money. Or maybe you’re having trouble paying off your student loans and looking for a better deal.
There are a lot of loans available now at great rates. But beware. Some scams are hard to spot unless you know where to look.
Ken Brewer didn’t know his daughter was looking for a loan online until it was too late. Now he’s warning you.
Brewer says her daughter wanted money to find an apartment and pay for her car. She found something online that said “Lending Tree”. It is a legitimate business. Brewer therefore says that her daughter applied and got an acceptance of $ 4,500 from Apple Federal Credit Union. It is also a legitimate business.
But it turns out that none of the actual companies were involved. Their names were used to legitimize the scam. Brewer says that in order to get the money her daughter was supposed to pay an upfront fee of $ 400. And the charges were apparently approved by the Arizona Department of Finance according to an email.
Charging an upfront fee before a loan is illegal and a sure sign not to go ahead. But right now, with so many people desperate for money, these scams are popping up.
Looking for a lower student loan rate? The Better Business Bureau has found 131 student loan consolidation scams in Arizona and Southern California. Victims were asked to pay an average of $ 300 to $ 400 up front. But there were no loans and they had no affiliation with the Ministry of Education.
Brewer’s daughter was asked to pay her upfront fees by purchasing Ebay gift cards. Before he knows it, Brewer says his daughter has lost $ 250 and he warns the others so they don’t become victims.
What are the warning signs? Asking for money up front and paying for something by purchasing gift cards is always a scam. Plus, all of this was done without a credit check. This never happens with a real loan. And it was all done by email. But the addresses are obviously wrong. The alleged Lending Tree email was from an Outlook.com address, not from lendingtree.com.
Finally, do your research thoroughly. This Arizona Department of Finance used to legitimize the loan does not exist.
It is almost impossible to get this money back. In most cases, the crooks operate in other countries. And if you are looking to consolidate student loans, it can be done for free on the department’s website.
The Federal Trade Commission cautions against loan scams and how to avoid them.