Signs to Identify a Fraudulent Credit

There are numerous cases of fraudulent credit scams every day – with which the user’s identity is sought to be stolen – it is higher every day, and although the majority tend to think that they would never be involved in that situation; The truth is that scammers are true professionals in social engineering techniques.

Anyone -especially in situations of vulnerability such as the need for money or work- is susceptible to falling into the trap.

“The objective of these criminals is to make money from us or steal access to an account that will use for illegal activities. Once the account is taken over, we become a victim of identity theft and a mule account holder, as this type of fraud is known,” says Oliver Sachgau, personal finance and investment expert at Vivid. 

“Banks monitor transactions to try to detect these cases, but no matter how many verification and authentication measures are adopted, if access to an account and personal data are not kept safe from third parties, you may be inadvertently collaborating with third parties. Swindlers”.

Five Most Relevant Signs to Recognize a Fraudulent Loan

1. Too Good to Be True

An offer of a loan for a large amount of money at meager interest rates when other entities have rejected an application should make us suspicious.

“There are entities that offer loans to people in unfavorable conditions or who do not have access to these products in traditional banks (because, for example, they are on defaulter lists), but in general, if the conditions are too advantageous, it is likely that don’t be trustworthy,” says Oliver Sachgau.

2. Informal Communication

The platform on which the credit is located gives many clues about the offer’s legitimacy. It may be a scam if you find yourself on a website that does not contain legal notices or European Standard Credit Information. It is essential to always look for the padlock in the browser or HTTP:/ in the web address, which indicates that the connection is secure.

Recognized institutions do not use social networks and internet forums to negotiate with their clients. In the same way, neither is WhatsApp, so if the contact is made through any of these channels, there are great reasons to believe it is not legitimate.

“The use of appropriate language is also important. Spelling mistakes, grammatical errors, or expressions that a native speaker would not use in a serious context are common in cases where scammers contact the victim from another country and use a translator to communicate,” says the Vivid expert.

3. Foreign Entity

Fake lenders often present themselves as a foreign-based entity, making it difficult to verify the company’s authenticity. Also, if legal action needs to be taken against fraudsters, it will be much more costly to prosecute them and apply Spanish law.

“The reality is that it is not usual for a lender that is not based in the country in which the victim resides to offer a loan because, in the event of default, it would be much more difficult for them to recover the money, so they would avoid taking that risk.”, comments Sachgau. “If they ask us to open a new account in a specific bank abroad to receive a loan, we should remain skeptical and contact the bank first. “

4. Few Questions

No legal entity would lend money without first checking that the person is solvent enough to pay it back. Usually, you must answer a lengthy questionnaire in which they ask about the job, the type of contract, the income, the family, or the valuable assets that can be presented as collateral. The amount they offer depends on the client’s profile and the purpose they want to allocate the money. So if none of these questions are being asked, that’s another red flag.

5. Confidential Data

It may seem obvious, but the password to access a bank account, the PIN of the card, and the codes received through SMS for authentication should never be shared with anyone, exclusively with secure digital platforms. Not even customer support agents in an authenticated chat will ask you for this information.

“Fraudsters can ask us to send them photos of our identity document or passport without respecting data protection laws, or even of the credit card that gives access to the funds of a personal account,” maintains Oliver Sachgau. “However, this should only be used by the holder, and nobody needs it to transfer a credit. “

In addition, of course, you should always read the contract carefully, which must detail the conditions:

• The amount of the loan
• The interest rate
• The repayment term
• The monthly installments
• The commissions

In short, the keys to avoiding being just another victim of one of these scams lie in the importance of being very alert to these signs and always keeping bank details confidential.