Payday loan offer - is it a scam?

October 10, 2012 00:32 by Consumer Ed

Dear Consumer Ed: 

I got a call from a man in Washington, D.C. who said he was with a payday loan company, telling me that I had received a loan for $1,000.   He gave me a confirmation number and told me I had to call his senior loan manager in order for the loan to go forward.  He then told me I had to pick the money up at a Western Union.  I declined, but am interested to know if this is legit.

Consumer Ed says: 

Almost certainly it is not.  At best, the phone call is likely just a scheme for the caller to make contact with you in order to sell you a loan or other product; at worst, it is a scam designed to get you to give over personal financial information so that the caller can then steal your money, commit identity theft, or both.

It is very unlikely that you actually have been approved to receive a payday loan because payday loans – indeed, all loans – require some sort of application and credit check, and you did not submit an application or take any other steps to apply for the loan.  What’s more, payday loans are illegal in Georgia.  So, a legitimate business would not attempt to contact any Georgia consumer about a payday loan.

According to Georgia law, it is illegal for someone to represent that a person has been selected to receive something when in fact the purpose of the call is really to make contact with prospective clients.  It is also unlawful to represent that a consumer has been “pre-approved” for a loan and then inform the consumer that he or she has to meet additional conditions in order to get the loan.

Another indication that this phone call is not on the up-and-up is the fact that the caller is a stranger, reaching you by phone, and asking you to use Western Union.  As a general rule, you should never give a stranger your bank account information, Social Security number or full name and address over the phone.  The use of Western Union is especially suspicious.  Legitimate lenders will not ask you to use Western Union.  Western Union is really meant for wiring cash quickly, such as to a family member who urgently needs it, but not for use with strangers.  That’s because wiring money is like sending cash; once it is sent, you can’t stop the transfer and get your money back. This makes Western Union quite appealing to scammers who want to take your money and remain anonymous.

The phone call you received may well have been an “Advance-Fee Loan Scam”.   It is likely that after discussing your supposed loan with the “loan manager”, he or she would ask you to pay some kind of up-front fee through Western Union. Remember that if you have to wire money in order to receive a loan or credit card, it’s a scam. 

Some tips you can use to avoid scams like this:

•    Only send money to people you personally know and trust;
•    Never provide your banking information to unknown individuals or businesses‎;
•    Never send money in advance to obtain a loan or credit card

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Is Walmart gift card text message a scam?

August 9, 2012 18:33 by Consumer Ed

Dear Consumer Ed: 

I received a text message that says I won a Walmart gift card. How can I tell if this is legitimate?    

Consumer Ed says: 

It is highly unlikely that the text message you received is legitimate.  This sounds like a version of similar scams involving purported “free” gift cards.  In March, the Better Business Bureau reported a scam in which many people received text messages promising “free” Walmart and Best Buy gift cards.  One such message read, “Walmart $1,000 gift card for the first 1000 users to go to [link] and enter code 2938.”  Another said, “You have been randomly selected for a Best Buy gift.  Get your $1,000 gift card at [link].”  Neither of these offers panned out.

This type of scam is known as “smishing”, a type of “phishing” scam where the scammer sends you a text message, instead of an e-mail.  If you click on the link in the text message, you’ll be required to provide personal information such as your credit card number or social security number before you can claim any gift card.  The scammers then use this information to steal your identity. 

If the link provided in any text (or e-mail) message doesn’t lead you directly to a page on the company’s main website, it’s more likely than not that the offer is a scam.  The most popular website being used in this particular smishing scam, for example, is www.walmartgift.mobi (rather than the store’s actual site, which is www.walmartstores.com). 

Walmart does give away legitimate gift cards to the winners of drawings for receipt surveys, and these drawings take place four times per year.  However, the winners of these gift cards are always notified by certified mail, not via email or text message.

Walmart, along with most other major reliable retailers, will never send you a text, telephone, or e-mail message asking for your personal information. 

Don’t respond to any messages that ask for this kind of personal information.  Also, you should never click on any links provided in the message. The scammers who send these messages are just trying to get your personal information.  Walmart’s current policy is that it never asks consumers, either online or in e-mails, to complete online surveys in order to receive a gift card.  And Walmart will not send you any e-mails or surveys that require you to make a purchase or pay money as a condition for participating.
 
Anyone receiving this type of text message should report it by forwarding the text message to 7726 (“S-P-A-M”).  You can also report it to the Governor’s Office of Consumer Protection at www.consumer.ga.gov or by calling 404-651-8600 or 1-800-869-1123, and to the Federal Trade Commission (FTC) at www.ftc.gov or by calling 1-877-FTC-HELP.

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How can I tell if an online lender is legit?

November 16, 2011 17:25 by Consumer Ed

Dear Consumer Ed: 

I applied for a $10,000 loan online.  I provided my Social Security Number and bank account information for the credit check. The company wants me to pay $1,200 up front (via wire transfer) to secure the loan.  They have a really good explanation for why they need the money up front, and I really want to send it, but I am afraid it might be a scam. How can I tell if a lender is trustworthy or not? 

Consumer Ed says: 

You are right to be concerned about this company and its request. Legitimate loan companies do not generally charge an upfront fee for a loan. Instead, they simply deduct any loan fees from the amount borrowed once the loan has been approved.  Another red flag is presented when a company asks you to pay via wire transfer. Scammers love wire transfers because they are hard to trace and it's practically impossible to get your money back once you have wired cash.
 
You should make sure the company has a legitimate street address and phone number. Avoid companies who use a post office box as their corporate address or who can only be reached by leaving a message on an answering machine or with a call-center operator. Companies who guarantee loans to anyone, regardless of their credit history, are typically scammers.
 
A good way to find a reputable loan company is to ask trusted friends or family members for a recommendation. You should also check the reputation of a company through the Better Business Bureau (www.bbb.org).  In addition, you can check with the city or county in which the company is located to verify that it has a valid business license. 
 
Don't provide your Social Security Number or financial account information to a company unless you first have determined that the business is reputable.  If you believe you have provided such information to a scammer, you should inform your bank or credit card company and request that they close down your account and set up a new one. In addition, you should consider putting a security freeze on your credit reports so that the scammer cannot open up a new account in your name.  To do so, contact each of the three credit bureaus:
 
          Equifax:  1-800-525-6285; www.equifax.com 
          Experian:  1-888- 397-3742; www.experian.com     
          TransUnion: 1-800-680-7289; www.transunion.com

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