Consumer Watch: Red flags to watch for when you need a loan


At the end of 2017 Americans accumulated more debt, and financial specialists project higher debt numbers in 2018. (file)

Over the last year, the Federal Trade Commission has been reaching out to consumers about loan scams. Many people in debt are looking for help and walking into the scammer’s traps.

The FTC has a list of red flags when it comes to advance fee loans, and steering clear of loan scams. People who need money fast, have been turned down by banks, and have poor credit are the intended target here.

The FTC says legitimate lenders will never guarantee you a loan, especially when you have financial problems. It’s a red flag when a supposed lender shows no interest in your payment history, or you’re told your past is not a problem. Your financial past may result in you paying some huge additional fees.

A second read flag to watch for is hidden fees. If you cannot find any clear information about the fee structure that comes attached to the loan, be suspicious. Also, the FTC says demanding fees up front before you get your loan is a cue to walk away.

The third red flag is any loan offer made over the phone. The fourth red flag to watch for is copycat or fake names. Always ask for the company’s phone number to check they are who they say they are, and look for the company information online. Be sure you are given more than a P.O. Box location, and that the company has a proper physical address.

The fifth red flag is if the company is not registered in your state. You will need to run a check to see if they are registered through the Secretary of State in Oklahoma. Lenders are required to be registered in your state to do their work.

Lastly, watch out for strange payment request. If a company wants you to wire money or pay an individual person, that’s your cue to walk away.

Your only safe recourse to solve your debt problems is to deal with them. You should make your best attempt at paying off your debts, or come to an agreement with your creditors.

This article originally appeared here via Google News