Millions of Americans are in dire financial straights today thanks to a collapsed housing market, rising consumer costs and of course the highest unemployment rate that we have seen in decades with no relief visible in the immediate future. Unfortunately these cash strapped people are perfect prey for financial bandits who want to steal the last of their money by offering them bad credit unsecured loans. When you're desperate you do desperate things and when you absolutely need the money, you'll ignore your own common sense and apply for one of these unsecured loans in hopes of getting some cash to carry you through.
As badly as you may need the money, don't fall for these frauds because their only objective is to clean out what little you have left in your account. So how do you know who's legit and who's a fraud? Check out these seven characteristics of fraudulent behavior.
1. Unsolicited offers
Thanks to the credit reporting companies' willingness to sell your credit info to anyone who has the money, the fraudulent loan companies have a highly targeted list of people in credit trouble. If you receive an unsolicited phone call making the offer, or your email box becomes flooded with "easy" no credit check loans, you are probably the target of one of these organizations.
2. Application fees
If an offer requires that you send an application or processing fee in advance of the loan being issued, it's a fraud. No legitimate lending company will require a payment until there is a signed loan document.
3. Additional fees
If you have made the mistake of sending in an application fee, don't be surprised when you are notified that you need to send more money. Usually the excuse for this request is they reviewed your credit and the amount that you sent doesn't cover the risk of them loaning money to you. Again no legitimate lender will ask this.
4. Requests that you wire money
No legitimate lender will ask you to wire money anywhere. If your lender is demanding that you send you "fee" by wire to a large city or even offshore, you are saying goodbye to your money.
5. Counterfeit offers
Some of these fraudulent loan companies have fairly sophisticated advertising strategies. They will place bad credit loan ads in the classified section of newspapers or on respected websites to lend credibility to their offers. Some have gone so far as to place legitimate lender logos on their ads. Their offer will sound professional and legitimate right down to the time that they ask you to wire money for a fee and fax all of your financial information.
6. So what can you do
If you fall for this scam you absolutely have to report it. Chances are you will not recover any of the money you sent but you have to give the authorities the information so they can develop the data and statistics to trap these people later. Report the case to the FTC (complaint form takes about 10 minutes to complete) and your local police.
7. Protect your identity
If you think things are bad now they could get significantly worse. You have sent these frauds all of your financial information including social security number, bank account number, a list of your credit card accounts and probably a copy of your driver's license. They have everything they need for identity theft. Immediately notify your bank and get their opinion about closing your accounts and opening new ones. Also contact all three credit reporting bureaus and file a fraud alert, same with any credit card accounts you still have open.
It's an unfortunate fact of life that the weaker you are the bigger a target you become for scammers. Just say no to these offers as attractive as they may seem. There are other legitimate ways to clean up your credit and get out of debt.
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