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Protect from Personal Loan Scam

Are you thinking of getting a personal loan? Hopefully you have a high credit score, as this will give you a better chance of getting the loan through a legitimate company. But even if your credit is excellent, you need to be aware of the personal loan scams out there.

2DNot Respecting Your Limit

  • You don’t want to do business with a lender that pressures you into borrowing more than you can handle

Upfront Payment

  • You should never have to pay any fees for the application process. If you’re requested to do this, move on.

Pumped up Interest Rate

  • Know what the going interest rate is. A good lender will quote you near this average rate.
  • A bad lender will recognize the desperation of the applicant with bad credit and try to sock them with an abnormally high interest rate.

Us and Only Us

  • Be suspicious of lenders that don’t like the idea of you shopping around for better rates.
  • This is a red flag that they have questionable loan practices.

Location, Location

  • An honest, legitimate lender or bank has a verifiable physical address. Get this confirmed with Google maps.
  • If you can’t, move on. But know that even a predatory lender may have a very solid physical address.

Solicitations

  • As in ones you didn’t request. Watch out for banks that send you unsolicited invitations for a personal loan application.

 

Don’t Be Intimidated

  • Because a seedy outfit may want to scare you into closing on their loan. But they can’t do anything to you, even if they use the term “legal action.”
  • If you want to reject their loan offer, then do so.

SSN

  • Does the lender want your Social Security number? This is fine if they’re wanting to do a credit check.
  • If they’re not doing a credit check but want your SSN, move on.

Signing Empty Documents

  • Do not sign anything that does not have the interest rate, terms, loan amount, monthly payment and other crucial information.
  • Before signing anything, make sure there are no blank areas that can be filled in later.
  • Run if the lender wants you to sign something that’s missing information.

Guaranteed!

  • Is a bank guaranteeing your personal loan? Sounds great, right?
  • Not so fast. They cannot do this if they have not verified your financial history or credit history.

Robert Siciliano is an identity theft expert to BestIDTheftCompanys.com discussing identity theft prevention.

What is New Account Fraud?

As long as identity thieves continue to breach databases and steal Social Security numbers, new account fraud will plague the public.

New account fraud refers to financial identity theft in which the victim’s personal identifying information and good credit standing are used to create new accounts, which are then used to obtain products and services. Stolen Social Security numbers are often used to commit new account fraud.

Since the thief typically submits a different mailing address when applying for new accounts, the victim never receives the bills and may remain unaware of their existence until creditors come seeking payment for debts the thief has accumulated in the victim’s name.

Variations on new account fraud include:

Utility fraud, in which the identity thief opens new utility accounts, such as gas, electric, phone, or cable, in the victim’s name, accounts for as much as 20% of all instances of identity theft.

Loan fraud accounts for approximately 10% of instances of identity theft. In order to obtain a loan of any kind, applicants are nearly always required to provide a Social Security number.

Credit card fraud is the most lucrative type of new account fraud, and the most prevalent, accounting for almost half of all identity theft cases. Simply put, identity thieves love credit cards because they are the easiest accounts to open, and they can quickly be turned into cash.

The availability of instant credit means instant identity theft. Identity thieves froth at the mouth when they obtain personal identification information and are in range of a major retailer.

An identity theft protection service can help mitigate the risk of new account fraud by monitoring your credit for new account activity, as well as by monitoring the Internet for your personal information.

One cool company that’s watching your back is iovation. iovation spots cyber criminals by analyzing the device reputation of the computers they use to connect to a website. They investigate for suspicious history and check for characteristics consistent with fraudulent users. And the best part is that iovation can prevent a criminal from using stolen data to open a new account in the first place.

According to Scott Waddell, Vice President of Technology at iovation Inc., “iovation sees identity thieves carry out their attacks in very short-time windows to exploit their newly stolen credentials.  What might typically look like one transaction to a single business is often a shotgun attack across our globally shared view.  One device may be opening a new credit card account, then going to an online retailer, then applying for instant credit all within minutes, and iovation can detect that through velocity triggers and shared experience across subscribers to alert the affected businesses and thwart the attacks. That’s great for the protected businesses and for the consumers who would otherwise be dealing with fraudulent charges made under their identities.”

Robert Siciliano, personal security and identity theft expert contributor to iovation, discusses Social Security Numbers as National IDs on Fox News. (Disclosures)