Confidential Customer Data Sold by Fake Loan Matching Sites

How loan matching scammers prey on the needs of desperate borrowers: Internet Scambusters #787

Loan matching works like many other online marketing sites — operators shop around for the best deal to suit applicants’ needs and credit records.

Or at least that’s the way it’s supposed to be. But all too often would-be borrowers are being scammed and their personal details sold to anyone who’ll buy them.

In this week’s issue, we’ll explain how these unscrupulous loan matching services operate and what you should do to avoid them.

However, before we begin, we first encourage you to take a look at this week’s most popular articles from our other sites:

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Let’s get started…


Confidential Customer Data Sold by Fake Loan Matching Sites


Online loan matching, where a web service searches for the best borrowing rates to meet your needs, sounds like a great idea, doesn’t it?

But, like the rest of the lending marketplace, it’s peppered with scammers who only want to get their hands on your personal information and sell it to others.

These crooks particularly prey on the needs of people with poor credit records who are desperate to borrow and prepared to disclose their personal information and to pay high interest rates.

The loan matching scammers find them using robocalls, telesales reps, and spam campaigns. Sometimes the would-be borrowers discover them online.

Victims may think these companies are the actual lenders but usually they’re not. They’re just marketing firms working on commission of up to $100 per lead from whoever wants these details.

They ask for information such as bank account details and Social Security numbers and promise to search for the best loan deals around.

In the case of scams though, they simply sell the information they’ve harvested without caring who the buyer is. Oftentimes, they link up the would-be borrowers with high-interest payday lenders who may or may not be legitimate.

Victims assume this is the best deal that’s available but the truth is that an unscrupulous marketing company likely hasn’t done any shopping around at all.

Meanwhile, this activity lands them a nice fat commission from the lender. In addition, the matcher may also charge a fee to the victim before supposedly arranging the loan.

Money seems to flow to the scammers from all directions, instead of into the wallets of those in need of cash.

Recently, the U.S. Federal Trade Commission (FTC) put a stop to some of the tricks of one online company that was running a large number of supposed loan matching websites.

These sites promised applicants that their personal details would be carefully protected while the service would search for the best available loan interest rate.

Instead, said the FTC, these details were quickly sold to anyone who was prepared to buy them — even if they weren’t actually in the lending business at all but wanted the details for some other purpose.

This firm apparently harvested details of about 15 million loan applicants but actually only matched around 2% with actual lenders. Even then, many of these applicants still didn’t get the money they were seeking.

This bears out the experience of NPR reporter Pam Fessler who tried a loan matching service by using fake personal banking details, but with her genuine phone number.

Despite the invented information, she got an email loan offer within just one minute followed by a telephone call from the supposed lender. The loan company said she could have $750 for one week and would have to pay $225 interest! That’s an annual interest rate equivalent of more than 1,300%.

She told the company she was a reporter and didn’t really need a loan. But instead of that putting an end to the issue, she received one call after another from different lenders, all eager to give her money despite not knowing who she really was.

“For months, I got dozens of calls,” she says. “Many of the callers had strong foreign accents… It turns out there’s a huge online bidding process for such loans. (The service provider) isn’t a lender at all but something called a lead generator. It finds potential customers and passes them on.”

In Fessler’s case, the service provider may not have been doing anything illegal. The companies like the one she contacted are, again, just marketing firms.

But they’re not loan matching at all — as the FTC discovered with the company it recently challenged.

“If you get calls from companies you don’t know, it might be because someone sold information you provided online,” the agency advised.

“Before you fill out an online form or application, check out the company. You can search online for the company name plus the words ‘complaint’ or ‘review.’

“Does the company explain how it will protect your information? Find out who will get your information before you share your Social Security number or financial details.”

This last bit may seem like sound advice — but remember, scammers, if that’s what the service turns out to be, will tell you whatever you want to hear, including how well they’re going to safeguard your information.

Online borrowing is fraught with potential dangers. If your bank won’t lend to you, you’re forced to enter a world of lenders that may not be carefully policed.

So be sure to do that online reputation search. And don’t rely on a single loan matcher to shop around for you. Do the shopping yourself by asking multiple lenders or matchers to quote you their best rates, ideally before you give them any information at all.

Alert of the Week

Watch out for a new version of the tech support scam — a voice message that flashes up on your screen warning “this virus is sending your credit card details, Facebook login and personal emails to hackers remotely.”

Not true. So, don’t call the supposed support number that comes with the warning. It’s not clear where this fake warning comes from — the Internet or malware — so run your virus checker just in case. Just don’t phone that number!

Time to conclude for today — have a great week!