Internet Loans: What to watch out for!

[full auto]

Bad credit can be a plague for many, and unfortunately a gold mine for scamming pieces of trash looking to hit people when they need a little extra help just to get by. Caveat emptor (let the buyer beware) when it comes to internet loans. Advanced fee loan fraud is getting to be all to common in todays digital age. So what are some things to watch out for?

Well, from some of the few things I've noticed for as long as I've been in the anti-fraud fight the following should set off some massive alarm bells if not make you run the other way:

1. Scammers love a source of non-traceable payment. Requests for payment via money gram or western union are all to common with this. Lets think of it this way, if a legitimate loan institution wants a "down payment" for a loan, they aren't going to ask for it via these methods as a financial institution. If Western Union or Money Gram is mentioned as a payment method for a lending firm, do not send it until you have verified that this financial institution is 100% legitimate. At that point I would even question the whole deal.

2. As mentioned above, never do business over the internet with a financial institution that you are not sure is 100% legitimate. So how do you determine if a financial institution is indeed a legitimate institution that is licensed to operate in your country/state/province? Banking regulators! Every financial firm is required to be licensed to operate through a country's bank regulator and within the regulators regulatory guide lines (e.g. some regulate by state or province). If the firm is not registered to the locality, they cannot offer any financial services in that country/state/province. Furthermore if they are not registered to the locality they are trying to offer financial services in, RUN THE OTHER WAY! That said, how do you determine the legitimacy of a firm? One of the best places to find a country's banking regulator is through the following link (the staff here has no problem helping you verify a financial institutions legitimacy as well so please do post questions if you have them):
Old Coaster's Banking Regulator List by Country

3. Google is your friend! Just because a firm is on the regulators list above does not mean that they are not trying to impersonate a legitimate firm in that country. Google the institution's name and the URL/domain name of the site you are trying to get that loan from. Is it a carbon copy of another different site? Do you find complaints about the financial institution? The possibilities here are endless for questions you can find with a simple google search. Please ask questions here if you do find something questionable and someone will be along to help.

4. Loan offers by phone, one word in the the United State of America: ILLEGAL! It is illegal for companies doing business in the U.S. by phone to promise you a loan and ask you to pay for it before they deliver. (text in this point totally ripped off from the Federal Trade Commission link listed at the bottom of this post as I simply can't put it better).

5. Fees that are not disclosed clearly or prominently. Scam lenders may say you’ve been approved for a loan, then call or email demanding a fee before you can get the money. Any up-front fee that the lender wants to collect before granting the loan is a cue to walk away, especially if you’re told it’s for “insurance,” “processing,” or just “paperwork.”

Legitimate lenders often charge application, appraisal, or credit report fees. The differences? They disclose their fees clearly and prominently; they take their fees from the amount you borrow; and the fees usually are paid to the lender or broker after the loan is approved.

It’s also a warning sign if a lender says they won’t check your credit history, yet asks for your personal information, such as your Social Security number or bank account number. They may use your information to debit your bank account to pay a fee they’re hiding.
* The above point copied in totality from the Federal Trade Commission link at the bottom of the post as it's rather important!*

6. This point is more on reading the person giving/offering you the loan, so it is not so much of an empirical method as the ones listed above, but still important. Does the loan agent seem interested in your credit history? If he doesn't that should raise some alarm bells. Does your lender beat around the bush and forget details a lot? That's somewhat unprofessional you would think.

The following is also something I would highly suggest reading before taking any loan offer from the internet if you live in the USA -
http://www.ftc.gov/bcp/edu/pubs/cons...ing/tel16.shtm

Buyers beware and always research research research financial decisions carefully!