In a digital-first world, scammers have sophisticated tools to target potential victims. Whether you’re seeking a personal loan, mortgage, business loan or other funding, it’s important to be aware of red flags and tactics that could be signs of fraudulent activity. Here are some tips to protect yourself when seeking loans:

What Are Loan Scams?

Loan scams are schemes in which criminals may pose as legitimate lenders or middlemen to trick consumers into paying upfront fees or sharing sensitive personal information. These scams may promise guaranteed approval, low interest rates or fast funding, making them especially appealing to those in financial need.

How Scammers Operate

Scammers may use tactics such as:

• Fake websites and emails that imitate real financial institutions.
• Unsolicited calls or texts offering pre-approved loans.
• Pressure tactics to push targets into rushed decisions.
• Upfront fees for “processing” or “insurance.”
• Requests for sensitive data, such as Social Security numbers or bank account details.

Red Flags to Watch For

• No credit check required. Legitimate lenders always assess risk.
• Unprofessional communication, including typos, vague terms or aggressive language.
• Untraceable payment methods like wire transfers or cryptocurrency.
• No verifiable physical address or publicly available contact information.

How to Protect Yourself

• Never pay upfront fees for a loan.
• Use official channels. Go directly to a bank’s website or branch.
• Check for licensing with your state’s financial regulatory agency.
• Monitor your credit report for suspicious activity.

What to Do if You’ve Been Targeted

If you suspect you may have been the victim of a scam:

• Stop communication immediately.
• Report fraud to the FTC at reportfraud.ftc.gov
• Contact your bank to secure your accounts.
• Place a fraud alert with credit bureaus.

Loan scams are evolving, but your awareness can too. By staying informed and cautious, you can decrease your chance of falling victim to deception and fraud. Always remember the rule of thumb: if it sounds too good to be true, it probably is.

Stay informed about the changing landscape of fraud and scams by visiting the Cadence Bank Fraud and Security Center often for new articles and resources.

Sources:
https://www.forbes.com/advisor/personal-loans/how-to-avoid-a-personal-loan-scam
https://www.consumerfinance.gov/consumer-tools/fraud
https://www.debt.org/credit/loans/loan-scams-to-avoid
https://finance.yahoo.com/news/sam-altman-warns-impending-fraud-233010895.html

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.