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How do you know if a loan is a scam?

October 27, 2020

If they offer you credits with very few or no requirements (most commonly “No Bureau” or “We not check Bureau”), run!

4 min read

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How do you know if a loan is a scam?
How do you know if a loan is a scam?


I’ve been leading for more than nine years Loan, an online credit fintech. During this time I have heard countless stories from people who are victims of fraudulent lending companies;; That is, companies that promise a loan with few requirements but end up demanding an advance to release the amount that is never deposited with the applicant.
The modus operandi of these financial ducklings is practically the same:

  • They offer credits with very few or no requirements (most commonly “No Bureau” or “We not check Bureau”).
  • You will receive your application and inform you that the credit is authorized.
  • You will be asked to make an advance payment in order to be able to deliver the loan (including analysis costs, administration costs, contract shipping costs).
  • Once you have paid the advance, you will never see your balance and they will no longer reply or will disappear.

I know some readers will say that it is very easy to avoid this type of scam and that they would never be so disappointed. But the combination of need, lack of financial literacy, and the sophistication of the scammers continues to lead to disappointed people. There are companies with internet portals that claim to have their process validated in front of a notary and will even send you a photo of the check on your behalf to convince you that the balance is already authorized before you go away with your advance .

So, once and for all, I decided to use a simple procedure to expose these companies to determine whether or not the loan was fraudulent. All you have to do is follow this flowchart to find out if it’s a legitimate company or a scam:

Image: Courtesy of Prestadero

Some skeptics will ask why there isn’t a legitimate situation where the financier is asking you for an advance on a loan. But why should you ask for an advance payment when you can perfectly calculate an opening commission and deduct it from the deposited credit? It just doesn’t make sense unless there is a possibility or certainty that you will not be able to provide the requested credit.

There are many ways to determine if this is a scam. However, if it is a scam, you will always be asked for an advance payment. Other common ways to identify fraudulent companies include:

  1. They ask you for credit with minimal or no requirements.
  2. Despite point 1, the credit they offer you is on enviable terms.
  3. They are not a registered company (although you have to go into the land register for that).
  4. When you search for reviews on the internet, you find that there is no trace of the company or that the reviews are terrible if someone has already complained about fraud.
  5. They use WhatsApp or Facebook to contact you and ask you to send information to a non-institutional email (like Gmail, Hotmail, Yahoo etc).
  6. Your internet portals (if any) are extremely simple and without functionality.
  7. They use names of legitimate companies to say that they will get credit from that company, but in reality they have no institutional mail and they will ask you for an advance again if the legitimate company doesn’t.

As you will see, there are many strategies and techniques available for cheating. However, if you find yourself in this situation, follow the flowchart I developed and you will never fall for this nifty deception. Enough that these deceptions continue to multiply and abuse people’s needs.