A payday loan can be a financial life-saver, but some people worry that they will be scammed or taken advantage of in their moment of need. Needing a loan can be stressful in itself, so you need to make sure that you are using a trusted and legitimate loan company. How can you ensure you are using a legitimate lending company if you need to borrow some money? In this guide, we will take you through ways to spot an illegitimate lender and how to check the legitimacy of the lender that you are looking at.
5 Warning Signs of a Illegitimate Loan Company
- The lender is not interested in your payment history.
- The lender demands a prepaid credit card and pressures you to act immediately
- The lender’s website isn’t secure
- The lender has no physical address
- The lender guarantees your approval
Top Tips for Checking the Legitimacy of an Online Lender
- Check the site is https: Ensure the lender’s site is secure. This means the web address will start “https” and not “http”- the ‘s’ stands for secure. If the URL starts with “http” only the site may be a scam and is not secure. You should also see a padlock symbol on any pages that ask you to provide personal information. The padlock means the address is protected from identity thieves. Keep your eyes peeled when it comes to the website of your lender.
- Check reviews online: Rather than just looking at reviews on the site itself, use a trusted third party that has no relation to your potential lender. Sites like Trustpilot will be able to give you company reviews from customers. If you cannot find the lender on any third party comparing and reviewing sites, there is a chance they are not legitimate.
- Check Terms and Conditions: Carefully read the terms and conditions of your loan. Firstly, if your loan provider doesn’t offer you clear terms and conditions, it will not be a legitimate lender. All legitimate lenders will comply with lending regulations that require lenders to lay out their terms and conditions.
- Check they have an address and phone number: Most legitimate lenders will offer both a physical address and some contact information. If there isn’t any contact information this will raise concerns about the legitimacy of your lender. If they do have a phone number, definitely give them a call. If you’re able to speak to someone you should get a good sense of the size and legitimacy of the operation.
- Are they regulated? Is the lender a member of the OLA or regulated by the SEC? You can always cross-check their details on the OLA website or SEC register and this will confirm their current status.
What Could Happen if I Choose The Wrong Online Lender?
There is really no telling what could happen if you give your personal and financial details to a illegitimate lender. There is the possibility of identity theft, which means someone stealing and using your personal details for their own personal gain. There is the possibility that your finances will be compromised. It could be that money is taken from your account and that your personal and financial details are used to take out loans in your name. This could not only lead to the loss of money, but will also damage your credit score, meaning you may not be able to borrow money in the future.
What Should I do if I Think I Have Been Scammed by an Online Lender?
Firstly, contact your bank and freeze or cancel all your cards. This way no one will be able to take money from your account. You will also need to call the police and report what has happened to you. The police will be able to advise you and you may be able to prevent someone else from being scammed as well. You may need to purchase new ID, like passports or driving licences, anything that was given to the scammers. You can often report these items as stolen, to protect you in the future.