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Loan shark scams: The way to spot a scam and protect yourself against criminals | Personal Finance | Finance


Experts discuss the scam on this week’s Scam Watch with James Walker from Rightly and Louise Baxter from the National Trading Standards Scams Team.

With costs rising around us, more people might be seeking to take out a loan, but for those who are in search of a loan, make sure you borrow from a legitimate company and concentrate on criminals and their often too-good-to-be-true offers. These scams can offer guaranteed loans that require you to pay an upfront fee for the loan. Once the fee has been paid, you don’t hear from the criminals again and the loan is rarely received.

Concentrate on loan sharks

A loan shark is someone who lends money to people without the required licence issued by the Financial Conduct Authority (FCA). So, before you get into any arrangement, make sure you check the FCA’s Financial Services Register.

If a lender is not listed as having a current credit licence, don’t borrow money from them.

Ways to envision if the lender is legit

Are you able to answer YES to any of the questions below? If yes, you will have been approached by a loan shark. If that is so it’s good to report it.

  • Have you ever been offered a money loan?
  • Have you ever been threatened once you couldn’t pay it back?
  • Does what you owe continue to grow though you’re making payments?

Once you report the loan shark, it would be confidential, and you possibly can report anonymously.

For more advice, and to report a loan shark visit Stop Loan Sharks.

READ MORE: Martin Lewis shares learn how to save £191.90 a yr on energy bills

What are payday loans?

Payday loans are small sums of cash paid over a brief time period and can be found from the high street and web sites. Lenders normally hold a Consumer Credit Licence, (nevertheless it’s value checking) and charge very high-interest rates.

In the event you determine to get a loan this fashion then ensure that you shop around and know and understand all the fees before you borrow any money.

There could also be higher ways to borrow money at lower rates of interest. Have you ever considered a loan from a credit union?

The way to avoid this form of scam

  • Read the small print (terms & conditions)
  • Be sure that the terms & conditions box has not been pre-ticked
  • In the event you do enroll and there may be a cancellation period. Be sure that you cancel inside that timeframe if you wish to cancel
  • Never provide bank details to a business without performing some checking first
  • Keep a duplicate of any advert you reply to
  • Is the corporate UK based? This might mean cancelling is far harder in the event that they aren’t
  • Check your accounts often for unexpected payments

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Q1 With Black Friday and Cyber Monday sales prolonged, how do I avoid knowing what’s real and what’s a scam?

Avoid buying from unfamiliar sellers: The expansion of independent retail web sites means consumers face some uncertainty in the event that they wish to buy unique or novelty items from less well-known brands. At all times take the additional time to read reviews and confirm that you simply’re coping with a legitimate company. In the event you’re buying from an unfamiliar retailer, take extra precaution and do your research equivalent to using Trustpilot to envision for real reviews and ScamAdvisor website to see if the url scores high or low on the legitimacy scale.

Watch out for dodgy looking web sites: Sometimes the scammers make very poor web sites with dodgy links. Sometimes easy spelling errors or deliberate letter changes in company names can provide it away. And lastly, never click unfamiliar links!

Suggestions of the week

At all times take a moment to stop and think before you give out any information. This easy motion could prevent a whole lot – and even hundreds – of kilos. Remember, a real firm won’t ever pressure you into a direct decision.

Don’t click on a link sent to you out of the blue, even when it looks legitimate. Go to the official website for the data, or for the proper contact details to get in contact yourself.

Take care of yourself, your family members, and neighbours. Anyone will be vulnerable on account of their situation or circumstances, so all of us have to stay alert. Discuss scams and share information. In the event you think you have got been a victim, report it.

Remember: If you have got received a text you think that is a scam you then can forward to 7726 or take a screenshot and send it to report@phishing.gov.uk. In the event you are receiving plenty of unwanted phone calls or text messages you may also consider removing your details from data brokers, ensuring that you simply use a right to object to processing of your data. You possibly can learn more about this on Rightly to stop the sharing of your data exposing you to scams. And you possibly can take a free training course on learn how to fight against scams on www.friendsagainstscams.org.uk. The more we speak about scams the more we take away the shame.

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