We’re nearing that time of the year—when you make a list and check it twice, you stress and you rejoice. It’s time for holiday shopping.
While some families do all of their shopping online, others brave the malls in search for that perfect gift. Families make large (and many) purchases and bills add up, so it can be tempting to take out a small loan to make things easier on their budgets—but these loan offers aren’t always legitimate. For that reason, we want to share some tips the Better Business Bureau (BBB) developed that will help families avoid loan scams. In fact, the BBB Scam Tracker received more than 100 reports of “advance-fee loan scams” all over Texas in 2018. These losses ranged anywhere from $25 all the way up to $7,000.
To make sure you don’t become a victim, follow BBB’s tips below.
1. “Watch for vague fees.”
“A scammer may try to collect fees before you get the money,” BBB says.
While it’s not uncommon to charge loan fees—including application, appraisal and credit report fees—a legitimate lender will discuss those fees upfront, not have you pay before you receive your loan. That’s what makes them advance fees.
2. “Avoid guarantees and unusual payment methods.”
“Trustworthy lenders won’t guarantee you a loan or certain interest rate before checking your credit score and other documents,” BBB says. Consider it a red flag if you’ve been “guaranteed” anything without providing important information. And remember, respectable lenders will never ask you to pay through what BBB calls “unusual or untraceable methods,” such as a wire transfer or gift card.
3. Do your research.
To gain your trust, some scammers might pretend to be from reputable agencies. BBB suggests you contact that agency directly to confirm any information given to you. Also, make sure your lender or loan broker is legitimate. BBB says that lenders and loan brokers must be registered in the state where they do business—so reach out to the Texas Attorney General’s office to confirm their status.
For more information on how to stay safe from scammers, visit the Better Business Bureau.
Image courtesy of iStock.