“Why do I keep getting voicemails about loans?” If you’ve been asking this question recently, you’re not the only one. Loan scams are on the rise, and some scammers are easier to spot than others.
What are the signs of a loan scammer, and how can you protect yourself from lending scams? Here’s what to know.
What Are the Most Common Loan Scams?
Today’s technology gives scammers plenty of opportunity to prey on unsuspecting consumers. Phone scams are still very much alive, but text, email, and fake-website scams are becoming more common.
Phone Call/Voicemail Loan Scams
If you keep getting voicemails about loan offers, you’ve probably been targeted by a loan scam. This is when lenders use robocalls to call you repeatedly. They often claim that you need to take action fast.
Some people call back out of sheer curiosity. When they do, the scammer may steal their Social Security number or other sensitive data, ask for upfront fees, or both.
Text/Email/Fake Website Scams
Some scammers will reach out to you pretending to be a legitimate bank or other company. They may use web addresses or email addresses that are slightly different from those the real business uses.
These scammers often create entire websites, which can be very convincing at first. If you get an unexpected email or text from a business, you should avoid clicking links or calling phone numbers provided in the message. Instead, contact the company directly via the official website or phone number you find on your own.
What Are Common Signs of Loan Scams?
Some loan scams are easy to spot, but many aren’t. If you notice any of the following signs, you should stop and investigate before proceeding:
- Offering guaranteed approval regardless of your credit score
- Pressuring you to take action right away
- Asking you for your Social Security number or other sensitive information
- Asking for online banking login information
- Charging upfront fees before loan disbursement
- Not having a physical address
In most cases, unsolicited offers, such as texts or phone calls, that offer loans are scams. Credit card companies often mail credit card offers, but legitimate lenders almost never call to offer loans.
Common Kinds of Home Loan Scams
In any discussion of loan scams, mortgage loan scams deserve a special focus. That’s because home loan scams often involve more money and more pressure. Here are some common examples.
Loan Modification
Scammers target homeowners facing financial difficulty. Posing as a lender, they offer to modify loan payments to make them more affordable. They then tell the homeowner to send mortgage payments to them instead.
When this happens, the homeowner defaults on their actual mortgage, and they’re likely to face foreclosure.
Foreclosure Rescue
There are several kinds of foreclosure rescue scams. Sometimes, scammers charge high fees, promise to stop the foreclosure, and never actually do anything. Some claim they’ll do a “forensic audit” of the mortgage to stop foreclosure. Others say they can negotiate with the lender in exchange for a fee.
Equity Skimming
This is another kind of scam targeting homeowners facing foreclosure. Scammers tell the homeowner to sign over the deed to the home. They promise that the homeowner can rent the home now and buy it back later, but instead, they take the house.
What Red Flags Indicate Mortgage Loan Scams?
Knowing how to tell if a mortgage lender is legitimate is essential for protecting yourself. If you’re wondering how to identify home loan scams, keep an eye out for these red flags:
- High-pressure tactics
- Asking for upfront payment
- Telling you to sign over the deed to your home
- Loan terms that sound too good to be true
The best way to find out whether a lender is legitimate is to contact them through official channels, not via phone numbers or email addresses provided in a message.
What to Do if Contacted by a Loan Scammer
If you think you’ve been contacted by a loan scammer, don’t engage with them. Avoid clicking links, downloading attachments, or sharing personal or financial information. Scammers often try to create urgency, but legitimate lenders will never pressure you to act immediately or request sensitive details through email, text, or social media.
Instead, take a few steps to protect yourself:
- Verify the lender independently by visiting their official website or calling a known customer service number.
- Report the scam to the Federal Trade Commission or your state attorney general.
- Slow down and avoid reacting to pressure or urgent demands.
Even if the lender turns out to be legitimate, stay cautious. Review all documents carefully before signing, and don’t feel rushed into making a decision.
How to Report Loan Scam Calls
Reporting loan scams can help you defend yourself (and others) against fraud. The Federal Trade Commission (FTC) has a dedicated web page where you can quickly and easily report fraud.
It may also be helpful to get in touch with your state attorney general’s office. In some cases, an attorney general may pursue legal action against scammers.
Always Stay Vigilant
Loan scams rely on three things: pressure, promises, and confusion. It can be tempting to claim a limited-time offer. However, if something is rushed or sounds too good to be true, it’s probably a scam.
Fortunately, when you know what to look for, protecting yourself is relatively straightforward. When you stop to think before taking action, you’ll know the right way to proceed.
