Common Types Of Fraud And Scam: Unauthorized Online Lenders

​Beware of the online fraud lenders! The number of fraudsters offering fake bank loans and/or credits online, on social media networks such as Facebook, or by email has increased considerably.

A scheme where fraudsters pretend as private individual lenders or claim to operate on behalf of a legitimate financial institution. They offer lenders credit lines or loans online, either through a website or social media platforms. Fraudsters will put more focus on collecting upfront fees for the so-called credit scoring or loan application and gathering the victim’s personal details for potential or abusive fraudulent financial transactions.

Remember

Before availing of a loan from a credit provider through a website or social media platform:

Do your research

• Find out the registered name of the online lender, the company that provides the actual loan to online borrowers. Online lenders often use trade or brand names different from their registered or legal names.
• Understand the nature of the relationship between the online lender and the technology or platform provider or platform. Online lenders often partner with technology or platform provider, the company that enables a web-based interface to facilitate loan applications, but is not the actual lender.
• Check the online lender’s track record and customer feedback. Look for red flags or warning signs of bad service and unfair practices.

Verify the online lender’s licenses, registration, and authorization documents

• Confirm that a BSFI—such as bank, pawnshop or e-money issuer that uses an online platform to provide loans—is licensed and authorized by the BSP. Search its name from the list of BSFIs on the BSP website, call the BSP Consumer Protection and Market Conduct Office, or chat with the BSP Online Buddy (BOB).
• Confirm that an online lender—such as a financing company or lending company is registered and authorized by the SEC. Check the SEC website regularly for advisories on unauthorized lenders or call the SEC to report unauthorized online lenders. 
• Remember that you have no protection or recourse when you transact with unauthorized online lenders.

Follow these basic tips to protect yourself

• Transact only with a duly licensed, registered, or authorized online lender.
• Transact only if you fully trust the online lender, its technology or platform provider and other partners, if any. 
• Share personal and account information only if you have proven the integrity and security of the online lending platform.
• Borrow only if you have fully evaluated your credit needs, calculated your amortization, and assessed your capacity to pay the loan in full and on time.
• Borrow only if you have read and understood all the loan terms and conditions including interest rates, fees, and other charges.
• Keep proofs of transactions such as loan agreements, official receipts, confirmation of payments, and related communications.
• Make sure that the online lender has an accessible and effective consumer assistance or redress mechanism.