Times are hard across the globe and they don't seem to get any easier as time goes by. In periods of local, national or even world strife people need to get more of one thing -- money!
By far the most accepted way of obtaining money to cover a shortfall in your financial situation, is via a loan. However, not everyone can get a loan that easily, and this leads to desperation, leaving the seeker open to abuse from loan sharks, dodgy money lending companies, get rich quick schemes and others.
For the purpose of this article, we concentrate on an email scam, which falls under the broad umbrella of Advance Fee Fraud, typically perpetrated by nationals of African nations such as Nigeria.
How Does It Start
Here is a very typical introduction that may appear in your inbox.
It looks and sounds plausible, seems to fit with an immediate need by the reader to obtain cash, so they would reply.
What Info Do They Want
As with all Advance Fee Fraud email scams, there is a stream of questions and forms to fill out which will ask for your personal information. You would be asked for your name, address and phone numbers as a beginning, followed by marital status, age and date of birth.
Fraudsters will also ask for banking details and account numbers, and almost certainly a scan of your passport or driving license.
Should I Be Giving This Information?
No! It takes only a small amount of information to become victim of online Identity Theft, and supplying personal and banking details to someone you do not know on the internet is a big no no!
Your personal details could be used to threaten you if you refuse to pay. After all, they know where you live because you told them. There could also be the threat of legal action if you refuse to pay, and you may in fact get an email from a seemingly real solicitor. These scare tactics will be shoved right down your throat because they know who and where you are.
Your banking details can also be used against you in ways that you could never imagine. How about the scammer paying in a fake cheque into your bank account? The bank would most certainly come after you, locking your account in the process.
Despite popular belief that publishing your banking details to unknown individuals is safe, look at what happened to UK TV presenter, Jeremy Clarkson, when he (and is big head) got in the way of common sense http://www.guardian.co.uk/money/2008/jan/07/personalfinancenews.scamsandfraud . This could happen to you too!
Scans Of Identity Documents
Why people send scans of ID is beyond understanding. This gives a fraudster all the tools they need to perpetrate crimes in YOUR name, using YOUR identity. The fraudster could use your scan and other personal details to dupe a victim into thinking they are dealing with a real person. In turn that victim pays thousands to the fraudster... all becuase YOU asked them to. The fraudster could also set up fake websites in your name to dupe even more people out of money.
How Does This Scam Work
Just like any other Advance Fee Fraud, this Fake Loan comes to you from someone not in your country. It is usually from an African nation and you will be offered what may appear to be a very attractive deal.
You would recieve documentation regarding the loan, such as terms & conditions, repayment information and the like. However, one thing will be dangling out there very quickly; A REQUEST FOR PAYMENT NOW.
The request comes as part of your application and usual excuses are that it is for solicitor fees, documentation or more frequently an insurance premium for the loan. If you pay this fee, then you have just been defruaded.
Why Is The Fee Fraudulent
Firstly because in most countries on the planet, asking for an upfront fee prior to acquiring a loan is illegal. This type of of Advance Fee is nothing new, but it has been abused so much by genuine lenders that laws now exist to protect consumers.
Next are financial laws of your own country. In most countries there is a financial regulator that banking and other financial houses must register with to obtain a license to trade. A foreign national in Africa offering you a loan should require a license in both Africa and your own country. If they don't have one, then they are certainly attempting to defraud you.
Finally is the loan itself; It simply does not exist in the first place. That's the piece of the puzzle that adds the word FRAUD to the end of Advance Fee.
This brief look at the AFF variant of Fake Loan should give the reader a clear indicator of what to look for if they are looking for cheap finance. Basically, if an offer lands in your email out of the blue, yes it's a scam, so ignore it.
Cheap loans are two-a-penny, and there are plenty of people out there willing to rip you off. If you cannot get finance from a bank or credit card, then looking for a cheap loan online will only worsen your financial situation. In the end you may loose everything including home and family.
Look before you leap.
References And Further Reading
- Federal Trade Commission (US) - Advance-Fee Loan Scams [links: http://www.ftc.gov/bcp/edu/pubs/consume ... tel16.shtm (english)
http://www.ftc.gov/bcp/conline/spanish/ ... loans.shtm (spanish)
- Federal Deposit Insurance Corporation (US) - Consumer Alerts http://www.fdic.gov/consumers/consumer/alerts/
- OnGuard Online (US) - Email Scams, Pay In Advance Credit Offers http://www.onguardonline.gov/topics/Email-scams.aspx#8 (english) http://www.alertaenlinea.gov/topics/Email-scams.aspx#8 (spanish)
- Data Wales (UK) - The Fake Loan Offer Scam http://www.data-wales.co.uk/ni_fake_loans.htm