Scams and fraudulent have become an epidemic in the finance world — specifically with loan scams here and there. Now that a lot of people are on the verge of a financial crisis, they tend to get victimized by those who are taking advantage of their situation. And with the online world being accessible to everyone and is very easy to manipulate, some do not even have the slight chance of thinking they are being scammed until the time they are left in the air with less money than what they had to begin with.
Scams with no credit check loans are much easier to get involved in and are very enticing. No need to present any official financial history records and most especially, no need to have a good credit score. If you are not careful in verifying the lender you are transacting with, the next thing you know, you are already scammed.
Here is a guide that could help you in assessing lending companies to avoid no credit check loans scams and know how you can protect yourself.
No Credit Check Loans Canada
Loans with no credit check in Canada have become one of the go-to options for loans for people who are in need of fast cash but do not have enough credit score to be approved for traditional loans. These types of loans, like payday loans and instalment loans, are short-term which means you need to pay them back after a couple of weeks to a month, depending on the lender’s policies. Since requirements and qualifications are only minimal — of legal age, has a steady source of income, checking account — approval rates are high.`
These less strict policies for no credit check loans are what frauds are taking advantage of. Their most common modus operandi is giving the client an ultimatum that they will be sending the loan, but first, he or she has to pay for the processing fee. After they have received that fee, they will then block and disappear, stealing from you hundreds of dollars.
Avoid No Credit Check Loans Canada Scams
Before applying for a no credit check loan in Canada, make sure that you are not transacting with a scammed process. Here are some tips you can do to check if the lending company is reputable:
- Do a background check.
Now that we have the internet, you can look up everything online, including the lending company that you are about to apply for. You can search for previous transactions, or maybe possible issues about them. Look into their website and read the services that they offer.
2. Verify license
You can have their license verified. All active lenders and lending companies must be registered in the government. You can contact your federal, provincial and territorial consumer affairs offices for verification.
3. Contact the potential lender.
Contact your lender and ask questions about their services. He or she must be able to walk you through the entire process and share with you all information that you need. If they are in a hurry and are forcing you to release personal information, like your social security number, and pay up certain fees immediately, then that is a sign they are up to no good.
4. Do not send personal information and money for fees beforehand.
Remember not to give them any information without verifying that they are a legitimate lending company and a reputable one.
5. Check for warning signs!
Always be alert for warning signs — they are always there.Of course, the first sign of loan scams is if they are not registered in your province. They are also likely to ask for private information like your social security number at the beginning of your transaction. You should also check if they have a physical address because if they do not, then it is already a red flag.
How can you protect yourself as a borrower?
In any loan that you apply for, make sure that you conduct proper precautions and research essential information that could help protect yourself as a borrower.
Do your research
Fortunately, the internet is full of resources that could help you when applying for a loan. There are websites, either privately or government-owned, that contain guidelines on what you need during loan application. Reputable lending companies will also provide you with all the information you need about no credit check loans before letting you go through with the process.
Know your rights
Every borrower has a right and responsibilities. Countries have set policies that would protect its citizens’ right before and during loan application. Your responsibility is to know about these policies so that you will know what to do in a certain situation. The Financial Consumer Agency of Canada protects borrowers and makes them aware of their rights and responsibilities. Never give out personal information.
Read the fine print
Another way to protect yourself as a borrower is to make sure that you are also aware of your responsibilities. It is your responsibility to read every document that they ask you to sign, especially with loan agreements. Point out anything that you think does not seem right. Also learn how to decline offers if your right is not being respected.
Ask your lender
It is your right to have a lender explain every information that you need to know, however, another one of your responsibilities is to be able to ask the right questions. Ask your lender if he or she could recommend other options that seem to be better for your situation. Remember to establish good communication with them so that you will have a smooth transaction.
Follow rules and deadlines
Lastly, before applying for a loan, you must ensure that you have the capability to pay it back on time. This is to avoid charges after charges that would put you into a terrible debt cycle.
Have you been a loan scam victim?
If you have been victimized by a loan scam, the chances of not being able to retrieve your money are unfortunately higher, especially if the scammer used fake names. However, if you find yourself in this situation, file a complaint immediately. Whether you get your money back or not, the most important thing that this will do is alert other people to be careful in the future. The Canadian Anti-Fraud Centre accepts reports regarding any fraudulent activity. Submit a report to them with the complete information and narrative of what happened along with evidence that will back up your claim — photos, screenshots, receipts, etc.