Royal Credit Union has noticed an increased number of scams that start with online loan companies. There are legitimate online loan companies that can help you get a loan through a website or by making a phone call. However, we’ve also seen several scams operating under the disguise of an online loan company. Scammers seek to take advantage of people who need funds by stealing their identity, their bank account information, or even their online banking login credentials.
How To Avoid Online Loan Scams
1. Don’t Talk To Strangers
One simple rule to spot scammers is to be on the lookout for a company contacting you out of the blue. If you receive an email, text message, or phone call from someone that you didn’t reach out to first, it’s ok to be suspicious! Legitimate online loan companies will usually only contact you after you ask them about a loan and provide your email address or phone number. Most people are probably aware of scam phone calls, but sometimes we let our guard down for other communication methods like texts or emails.
2. Do Your Research
Another helpful tip is to think twice before providing your personal information. If someone you didn’t recognize called you when you weren’t expecting it, you probably wouldn’t tell them your social security number or bank account number. Use the same level of caution with text messages or emails. If an online loan company claims that they need your information to check if you qualify for a loan, do your homework first. Research the company online, looking for reviews or reports of scams related to the company. If the company seems new or doesn’t have any references, it’s a good reason to ask more questions before working with them.
3. Never Give Out Financial Institution Usernames Or Passwords
One piece of information that you should never give anyone is your online banking username or password. You are the only one who should have access to your online banking or mobile app. No loan company should ever need to log in to online banking for you. When you give someone else your login credentials, you are giving them complete control over your money, almost like handing them cash. Criminals can transfer your funds to their account, change your login information so you can’t access your account, or apply for new accounts or loans using your information. Never share your username or password with anyone, even joint account holders. Each person on the account should have their own username and password, and no one else should ever have this information.
4. Protect Your Account Number
After the loan approval process is complete, an online loan company only needs two pieces of account information to deposit funds to your account: your routing number and your account number. All Royal Credit Union accounts use the same routing number, 291880411, and routing numbers are public information. Your account number, however, is unique to your account. Unscrupulous people can use your account number to impersonate you when making transactions and more. If you choose to work with an online loan company, only give them your account number after you’ve confirmed they are a reputable, legitimate lender.
5. Asking For Money Back Is A Red Flag
If an online loan company deposits money into your account, but asks for some or all of the money back, this is almost surely a sign of a scam. Criminals use a variety of excuses to explain why they need the funds returned, like claiming an error was made or that they need to verify your account to authorize a larger deposit. Don’t be fooled. Legitimate online loan companies wouldn’t put money in your account just to ask that you give it back. And if the company is asking for the money back multiple times or bugging you at all hours of the day to return their funds, you have all the more reason to be suspicious.
A related red flag is if the person or company asks for the money to be returned in the form of gift cards or via a smartphone payment app. Gift cards and mobile payment apps are often untraceable, and transactions usually can’t be reversed – which the thieves use to their advantage when the victim realizes what’s happened. You probably wouldn’t hit the ATM, withdraw a couple hundred dollars in cash from your account, and hand it back to a stranger, but that’s essentially what scammers are asking you to do in these situations. If you’ve gotten to this point and the scammer is asking you to return the money, we recommend contacting us to help you take action to secure your accounts.
We hope this information helps you avoid becoming a loan scam victim. Remember that Royal Credit Union is always here to help answer your questions or investigate suspicious activity on your accounts. We can also help you take appropriate action if you’ve been taken advantage of or if your accounts have been compromised.