Do you hear that scurrying sound? It’s cybercriminals around the world rushing to create fake lending businesses as prices and interest rates go higher and higher.
With inflation and rising borrowing costs squeezing consumers, scammers are at the ready with deceptively attractive loans and terms. These are offered under false pretenses to steal money through exorbitant upfront fees, or to steal your identity by capturing enough of your personally identifiable information.
A Growing Problem
It’s all too easy for a fraudster to register a website domain, create a fake company and blast out phishing emails in hopes victims will respond to loan offers that seem—and are—too good to be true.
We’re seeing an increase in shady business and personal loans offered via phishing campaigns as people look to cover everyday expenses and big-ticket items alike. It’s evident a cottage scam industry for loans has emerged.
Phishing Forensics
As senior fellow of threat research for Fortra, I use various email aliases and tools to dig into these types of scams. Recently, I received business financing offers from five different senders, each representing a different company with its own website. Or so it seemed.
When I dug into the domain registration for each site, I found they were all established within seconds of one another using the same registrar—indicating all five were created by the same person.
The websites were simple but well done, and each featured a different business address. A closer look, however, revealed that each business address was in a building with a shared office space.
I’m not sure about the extent of this scam, but it’s clearly a coordinated effort. I have no doubt even savvy consumers are falling for it.
Examples of the Latest Loan Scams
If you look in your spam folder, you may see examples of the following scam types. Some emails will be so poorly written and laden with emojis and other obvious signs of being fake you may be inclined to wonder who would click on them.
However, others look much more professional, with crisp writing, good graphics and even lengthy legal language in the footer. They will appear to come from legitimate banks, credit unions or online lending platforms.
The emails may pitch:
- Emergency loans for struggling homeowners
- Student loan forgiveness or consolidation
- Loans for military service members or veterans
- Payday loans
- Loans for consumers with bad credit
- Debt consolidation
7 Loan Scam Red Flags
If you receive an unsolicited visitor, phone call or email with an offer that features any of these seven warning signs, it’s best to pass.
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- Significant upfront fees. Loan scammers typically ask for steep origination and administrative fees, and they want these costs to be paid using hard-to-trace methods such as mobile payment apps, cryptocurrency or gift cards. Once you’ve submitted payment, you’ll never hear from the “lender” again.
- Guaranteed approval. No legitimate bank or lending service will approve a loan without evaluating your credit history.
- Urgency. This is a scammer’s favorite manipulation—or social engineering—tool. They’ll say immediate funding can be yours if you act quickly to secure this “special offer.”
- BBB accreditation. Many loan scams claim Better Business Bureau accreditation. See if you can find the purported business on the BBB site.
- State registration. Lenders are required to register with the states where they offer services. Check with your state attorney general’s office to verify if a lender has the required registration.
- Email. Be suspicious if a lender claims to have been in business for 20 years yet uses a free email service. Right click on a sender’s name to see the actual email address and not just what appears in the “From” line.
- Dubious office location. If the address on communications is a P.O. Box or shows up in an online location search as a virtual office or coworking space, steer clear.
Note that many scammers will create a fake loan business that sounds almost identical to a household name, with a similar URL to match, to build credibility and give you a false sense of security that you’re dealing with a trusted business.
Steps To Take If You’ve Been Scammed
If you’ve been duped by a malicious lender, take heart—you’re not the first person to fall victim to scammers. Here are a few tips to help you handle the situation.
- Keep records. Retain evidence of fraudulent activity such as emails, voicemails, website URLs, screenshots or any documents you receive. Capture the names and phone numbers of callers.
- Monitor your credit. Keep an eye on your credit reports to ensure no one is taking out loans in your name without your authorization. It’s also good to monitor your Social Security account for evidence of misuse.
- File a complaint. Report loan fraud to the Federal Communications Commission and the BBB Scam Tracker.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
