A great many people find themselves in financial difficulty at points during their lives.
At these times, in many instances, individuals find themselves in a position where repayments of debt become impossible and a bad credit record inevitable.
In order to make attempts at clearing debts, most people generally approaches banking institutions, credit companies and other financial institutions in order to obtain credit.
Having a bad credit record close these avenues to individuals already in financial difficulties, and they are forced to look for alternative measures of obtaining loans and / or credit.
Many institutions advertise their services in classifieds of national and / or local newspapers, guaranteeing loans to any individual, whether they have a good or bad credit record.
To many individuals in financial difficulties, these are often the only way in which they are in a position to obtain loans and / or credit.
Unfortunately fraudsters have identified this weakness in a person’s financial standing and they have steadied themselves in this sector in defrauding vulnerable victims.
HOW THE ADVANCED FEE LOAN SCAM WORKS
In many instances fraudsters will advertise non existing companies in classified sections of newspapers offer guaranteed loans, especially to people with bad credit records.
Often these offenders will make use of only mobile numbers, in order to ensure that they can not be traced at a later stage.
In rare instances, fraudsters might go the whole nine yards in renting office space and installing land lines for their scrupulous business activities.
Often these type of offenders will conduct their activities in large towns and cities where they are assured to target a large number of victims.
Once a victim applies for a loan with these offenders, they will be informed that the loan has been approved, but that a small fee is required before the loan can be paid out to the applicant.
In the majority of instances the fraudsters will inform the victims that this fee is some “Administration Fee”.
Victims will be informed that the payout of the loan will generally be affected only 10-14 days after the payment of the ‘administration fee’.
Depending on the nature of the scam conducted, victims will be requested to conduct payment by means of direct bank deposit, money orders or Internet payment.
In the case of smaller scams, the fraudsters will collect the administration fee directly from the victim.
Once the fees are paid, the payout of the loan will not be affected.
The victim will have lost his fee paid to the fraudsters and never receive the loan applied for.
What to look out for in protecting yourself
GUARANTEES
Always remember that legitimate organisations can never guarantee any loan.
Any business in this industry’s main aim is to protect their own interests and there will always be instances where loan applications will be declined.
TELEPHONIC BUSINESS
Always be wary of conducting telephonic business.
It is often impossible for a credit granter to assess any information on a client by only dealing telephonically.
You should also ask yourself why the company would not want to meet a client at their premises.
THE COMPANY
Conduct research on the company.
Are they a registered and established business practise?
Conduct research on comments from other clients on the Internet or ask questions about the company to friends and family or other businesses in the vicinity.
YOU NEED TO ASK QUESTIONS ABOUT UPFRONT FEES
It is common around the world that many smaller credit granters may ask upfront fees in order to cover charges in researching a person’s credit history and processing the loan application.
The majority of advance fee loan scam offenders often claim that these fees are guarantees that the client is locked to the loan application, and will not loose out to other clients also applying for loans.
These offenders often request clients to pay the fee with immediate effect.
Always ensure that you ask questions to determine what the loans are for.
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Article by Lee
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