When you are in financial trouble, whether you’re about to default on your mortgage payment or you incurred hefty medical bills, applying for a loan can provide temporary relief and allow you to get caught up on your finances. However, it’s imperative to understand that there are several loan scams that you must be aware of to protect your finances and personal information. The following blog explores some of the most common schemes used to commit fraud and the importance of working with a San Diego consumer lawyer to assist you through these difficult matters if you believe you are a victim of a loan scam.
What Are Loan Scams?
A loan scam occurs anytime someone other than a legitimate lender tricks you into applying for a loan that they will never provide. Generally, these always involve the applicant paying fees upfront for assistance.
Unfortunately, the primary objective of these scams is to cheat hardworking individuals out of their money and personal information. Not only can you suffer the loss of the funds you’ll pay through the astronomical fees these scammers require you to pay for their “help,” but you’ll also find that these thieves will steal your personal information to further steal from you. When you provide your personal and financial details for a fake loan, the “lender” can use your details to take out real loans in your name, leaving you with a decimated credit score.
These fake lenders often target those who are vulnerable and in financial trouble, such as those who are looking for mortgage relief to avoid foreclosure or to repair their credit score. Unfortunately, these lenders will require a fee for help they will never deliver, leaving those in financial trouble with even less funds.
What Are the Signs a Loan May Not Be Legitimate?
One of the primary signs that a lender is a scammer is that they require upfront fees. Legitimate companies will never ask you to pay fees for applying or require money before approving you for a loan. Additionally, if a lender informs you that you will automatically be approved for a loan regardless of your credit score, this is an indication that they are not legitimate and instead are just looking for as many applicants to scam as possible.
You should also note that if the lender attempts to pressure you into applying or signing a loan agreement, it is likely a scam. Legitimate companies must follow careful steps when interacting with consumers to ensure they adhere to the law, whereas scammers will attempt to take advantage of those in dire circumstances by making it seem as though the offer is too good to pass up.
As you can see, loan scams can be devastating, especially when you are already in a vulnerable financial situation. However, when you are scammed out of money and your identity is compromised, it’s imperative to connect with an experienced attorney with Barthel Legal as soon as possible. Our firm understands how difficult these matters can be, which is why we are committed to helping you through these challenging times. Contact us today to learn how we can fight for you.
