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Identify and Avoid Loan Scams: Here’s How


Loan scams are rampant everywhere. These may involve payment of fees for a loan that “lenders” promise to grant, but result in fraud or taking something from you either in the form of cash or personal information in the end.
But no matter how much you warn people about loan scams, a significant number of people still fall prey to this fraudulent act. And the reason is quite simple: people dealing with money problems can easily get swayed by all kinds of deals.
Further, since many loan scams transpire online nowadays, Malaysians are dubbed to be the most vulnerable to being victimized. A survey made found that almost 50 percent of the respondents have had a history of getting tricked by fraudulent practices on the internet. In the Philippines, economic and cyber crimes are prevalent, too—with reports saying that the country ranked seventh as the most attacked country on the mobile platform.
Despite the bleak scenario, there are signs that give away that you may be dealing with fraudsters.
Common Types of Scams: How to Identify and Avoid Them

  1. Predatory Lending

This lending practice targets people who are ineligible for loans from credible institutions like banks or government-owned organizations like GSIS, SSS, or Pag-IBIG. You’ll see loan sharks advertise their trade in public places and online channels with promises of approval regardless of your credit history.
The illegal trade comes in the form of enormous interest rates so that you end up paying more than what you loaned for. As soon as you see the come-on phrase “No Credit, Bad Credit, No Problem,” you shouldn’t think twice about running away from these loan sharks.

  1. Money Transfer Conversion Scam

Wire transfer services are usually used by freelancers to receive payments from their clients for services rendered. Unfortunately, there are already scams involving the money transfer funds of poor, unsuspecting victims.
Since those funds take some time to be available for withdrawal from local banks, scammers promise to give you instant cash for your funds as they buy your funds for a particular exchange rate.
To kickstart the transaction, they will ask you to buy something for them online. As soon as you have made the purchase for them, these scammers will quickly do a disappearing act.
To avoid getting duped by this kind of scam, you should always transact directly with your bank.

  1. Fund Transfer Scam

You’ve probably received one of those “urgent” emails, claiming that there’s a huge sum of money in possession of the “generous donor” who’s willing to give some of it to you or forfeit the cash altogether. In exchange, you either have to provide your bank account details or shoulder the transaction fees.
The whole thing might sound utterly ridiculous, but the email sender sounds so genuine, not to mention that it’s a tempting offer that you forget about all the nonsense and agree to the instructions given to you.
There are several red flags here including the urgency of the email and the idea of paying fees for something you have yet to receive. Be logical and never give in to these hoaxes.

  1. Car and Home Loan Scams

You might think that this type of scam is so eighties but you’re wrong. Scammers will always find a way to continue their illegal trade as long as there are people who seem to be clueless about what’s happening around them.
Basically, people behind this scam will offer the sale of pre-owned cars or houses, so you think of getting a loan to make the purchase. What you don’t know, however, is that the property for sale may have been obtained through fraudulent or illegal means.
To avoid running into this kind of situation, be sure that you know the physical address and contact number of the seller, they have authentic supporting documents or paperwork showing previous ownership, and you get to inspect the car or house in question.
When in doubt, you could go to government agencies like the LTFRB and Land Registration Administration to verify details about your target purchase.

  1. Auction Scams

People looking for rare collectors’ items are the usual victims here. They may take part in online auctions where they hope to score precious items. This type of scam happens when you pay for something but instead get an identical, unauthorized, or cheaper version of the product.
Be sure to transact only with legit sellers on an e-commerce site or pawnshop. Take the time to check the reviews, feedback, or comments of previous buyers, as most of them would be even happy to share some tips with you to help you avoid the hassle of buying online.
You could avoid getting scammed if you are vigilant about things that seem too good to be true. Before stamping your name or cashing out from your wallet, do your homework first. After all, a little waiting time won’t hurt compared with acting on impulse out of wanting money.


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