Loan fraud prevention

If you’re ever offered a loan with no questions asked, this is the kind of transaction you want to avoid. A responsible loan company is required to make checks and ask specific questions to protect you, as well as make sure you can afford to repay the loan.

What’s more, if someone is offering you something that is way better than anything else on the market, it could be fraud. Do your research, check if the company has an online presence and if they’re a financial services company, check the company is on the FCA Financial Services Register. Fraudsters have been known to make copycat websites and social media of legitimate companies, so it’s also worth fact checking the information on there and the website URL.

Top tip: Although all fraud cases are dealt with on a case-by-case basis, keeping evidence that you’ve made all the necessary checks before sending your money could help you get your money back. So, before moving any large sums of money, take screenshots of checking the corresponding numbers on the company website and the FCA Financial Services Register, and of any other precautionary checks you make.

It’s okay to answer a few data protection questions from a company that already has your details (for example your name, date of birth and email address), but never give away your pin, passwords, bank account numbers or other personal details. Especially to a company you don’t know.

If you’re asked for the first instalment of a loan repayment over the phone, do not pay it. It’s unlikely you will see this money again. A genuine lender will ask you for approval to set up a Direct Debit to take the first and the following repayments at agreed times of the month.

Sometimes, fraudsters also ask for money to complete a service before it’s been carried out. For some companies or industries, this can be standard practice. However, a key warning sign is if someone requests you bank transfer the payment or if a payment upfront seems unusual.

If you’re worried, don’t make the payment straight away. If it’s finance company, check that they’re registered with the Financial Conduct Authority (FCA) before moving any money. If not, do your research online first to make sure you’re confident the company is legitimate before sending your money.

There are so many loan companies out there, so use the internet to carefully check the loan company’s business credentials and any customer reviews. Find out exactly what the loan company can offer you, and be sure to read their loan agreement – and seek expert help if anything’s not clear.

Fraudsters often use time pressure to make victims take a quick decision without thinking it through. For instance, they may give you a time sensitive offer or tell you that your service will be cancelled if you don’t pay a fee today. Take a breath and check your records to see if what they’re saying is true before making a payment.

You should never feel pressured by a loan adviser to sign up to a loan or accept credit you can’t afford. Shop around for the best loan or credit agreement. Be sceptical and ask questions.

Trust your instincts. If a person says that they’re calling from a loan company (or any finance business) and asks you for personal details and you don’t know who they are, or if things just don’t feel right, end the call. You can always ring the company you think you’re speaking to back on their official phone number the next day.

Fraudsters often contact people out of the blue via phone, SMS, email or social media. Watch out for unusual phone numbers, email addresses or fake social accounts. Avoid clicking on any links in emails or texts and never give out your passwords or pin numbers.