Short Term Loans are becoming more and more popular as the financial situation in the UK tightens. Fortunately it is not difficult to get a short term loan and the internet has certainly made it easier to secure a loan. However, because of the ease of accessibility scams have also become more prevalent. Scams have always been a part of western civilisation. People have been cheating each other out of money ever since we invented it, so it’s no surprise that loan scams have popped up on the internet en force. The problem, however, is that there are many legitimate lenders online that make taking out a quick cash loan easy and user friendly. How does one separate the good guys from the bad guys? It’s not easy trying to divine from your computer screen whether or not the loan company on the site in front of you is going to take you for a ride or actually deliver the cash loan they promise if you follow their protocol.
So let’s look at how to spot a scam. It is very hard to spot a fake loan or credit brokerage site. We all know the names of the big legitimate old school banking and building society institutions, but there are so many online lenders these days that it’s difficult to tell. Be wary, very wary. Here are five points to consider when taking out an instant cash loan on the internet:
- Did the lender contact you? Don’t you think this is a bit strange? You haven’t actually asked anyone for short term credit and all of a sudden here is someone offering it to you. All the alarm bells should be ringing at this point. How did they get your name, phone number, or address? This lender shouldn’t even make it past this first point. Get rid of him now. Legitimate lenders don’t go around contacting people!
- Ask yourself if the terms of the loan are too good to be true. With a bit of clever questioning you can fish out suspicious terms of the loan. For example, there are no legitimate lenders who will approve a loan regardless of bad credit history. Also there are no short term loans with exceptionally low interest rates
- The company must have an Interim Permission Number. As of April 2014 all lenders must be registered with the FCA (Financial Conduct Authourity). It’s as simple as checking the number against the FCA register which can be found online. But…
- Check the IP number again. Some of these con-artists actually steal the registration numbers from legitimate lenders and use them as well as very similar names or the same name with one letter changed. This is called a ‘clone loan’ scam. All you can do is check and recheck and try to outsmart the scammer by, for example, calling the main office of the company (that they are pretending to be) for information.
- The last sign is the mega give-away that you are being scammed. The up-front payment. Your lender will tell you that you need to pay a fee in order to secure your cash loan. Once you pay this fee the cash will be transferred directly to you. Reasons for this upfront fee can be ‘insurance, the first installment, to activate the loan, to verify your details, a set up fee,’ amoung many others.
Be wary borrower, because once you part with your cash there is little to no chance of getting it back. Good luck!