10/06/2023
How to Identify and Avoid Online Loan Scams in the Philippines
Online loan scams have become a prevalent issue in the Philippines. In fact, it's now one of the fastest-growing organized crimes not just in the country, but all over the world.
These scammers employ a wide variety of tactics to take advantage of people who are desperate for cash or have financial problems. To avoid becoming a victim of these scams, it’s essential to learn about the different types and how to spot them.
What are loan scams?
Loan scams are ways in which scammers or fraudsters trick people into giving them money or personal information with the promise of a loan that doesn’t even exist. Online loan scams are commonly done through platforms like websites, social media (this includes messaging apps like Viber, FB Messenger, etc.), and e-mail.
Types of Loan Scams in the Philippines
1.Advance Fee Scams – Fraudsters will ask their victims for an upfront fee or a deposit so they can release the loan amount. Once they receive the fee or deposit, they’ll suddenly disappear.
2.Phishing Scams – This one’s called a “phishing” scam because fraudsters use bait to lure their victims in. In this case, the bait is typically a link to a fake website sent via email or an SMS. Victims will then enter their information into the website, thinking they’re applying for a legit loan. But really, they’re just giving all their data away to the fraudster.
3. Identity Theft – Some fraudsters steal the personal information of their victims and use that to apply for loans. When this happens, the victim becomes responsible for repaying that loan while the fraudster gets all the borrowed cash.
4.Loan Shark Scams - Fraudsters who commit loan shark scams pose as legit lenders to inexperienced borrowers. They then charge ridiculously high interest rates with unreasonable repayment terms. These pile up, forcing victims to pay way more than they need to.
How to Identify Online Loan Scams
Scammers are getting smarter by the day, but there are usually a couple of signs that you can spot from a mile away. Here are a couple that you should watch out for.
They’re Pressuring You to Hurry and Act Now
Legit lenders know that taking out a loan is no small thing. It’s a commitment that requires plenty of time for consideration. If the lender you’re talking to gives you a strict deadline to sign the contract, then they’re probably doing that so you don’t have time to spot red flags. Don’t fall for this tactic, luv!
They’re Promising Instant Approval – No Questions Asked
Just as you need time to decide on a loan, legit lenders also need time to review your application and consider factors such as your verifiable identity, credit worthiness and debt-to-income ratio. If they ask for none of those things and they tell you that you’ll get the loan no matter what your debt history is like, that lender could be a scam.
They’re Not Transparent About Their Fees
Honesty is key. That’s true for relationships, and that’s true for loans. If the lender you’re eyeing doesn’t have their fees listed on their website – or if they refuse to disclose them even when you ask – then it’s probably best to look elsewhere.
