How does Online Fraud happen when Requesting a Loan?

There isn’t much we can’t do with the internet these days; it affects almost every part of our life. It would be hard to imagine living in a world where we don’t have access to all the benefits it brings to us.

It gave us the chance to more conveniently manage significant elements of our lives like shopping, communicating, entertaining, studying, even managing our finances.

In some nations, it even allowed people to access services they couldn’t access before, such as education, communication, and banking.

While we use digital technology and the internet to better our lives, cybercriminals do the same. They use the advancement of digital technology, the digital transformation of various sectors of the economy, and the ever-increasing presence of the internet to evolve their fraudulent practices.

Their main goal is to find ways to realize the financial gain and to inflict even more damage to their victims.

While you may take advantage of the convenience of the internet to conduct your financial transactions, fraudsters find a way to exploit that convenience.

For example, they can gain access to your personal information and use it to request a new credit card, apply for a loan, or even pose as a loan company and take advantage of your trust.

The worst thing about financial frauds like loan fraud is that they can be hard to discover, and it can take a long time to resolve all the issues it causes.

According to SEON’s protection against payday loan fraud, there are several steps you can take to protect yourself from becoming a victim of loan fraud.
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How can you recognize the signs of payday loan fraud?

The most important thing you need to do when requesting a loan is to do your due diligence and to be mindful of any red flags you might notice in the process:

The way they are communicating:

Do you feel pressured? Is their communication professional and formal? Are they asking for details they shouldn’t like your online bank sign-in information?

Check their spelling and grammar as that can usually indicate that you are not dealing with a professional but with a fraudster.

Suspicious processes:

Are they requesting some form of deposit or insurance before you get your money? Are they suggesting you pay “insurance” upfront to secure a lower interest rate? Are they vigilant in verifying your identity or your credit history, or it looks like they are not really interested in it?

Did you do your research:

Can you find info about them online? Are you able to confirm they are registered and licensed companies? Is their email legitimate company email, or are they using Gmail or Yahoo?
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How can you protect yourself from becoming a victim of loan fraud?

Fraudsters keep on discovering new ways of scamming innocent people out of their money, and unfortunately, they are not going anywhere. Between April of 2020 and March of 2021, fraud reports have rocketed by 33%, and the number keeps growing.

It is time to take your online safety into your own hands and learn how to protect yourself against fraudulent behavior.

Always do your research.

If you plan to apply for a loan, do not choose the first company you see, you can always go online to find information,

For example this CNBC article on how to flag scam lenders. Fraudsters are good at getting people to trust them and pressuring them into making decisions before they are ready. Common sense could prevent many fraud attempts if you relied more on it.

You wouldn’t trust just anyone with your bank account, then why would you take out a loan with the first company that offers? Ask the right questions, do your research, and put your safety first.
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Protect your devices.

Install firewalls and anti-virus software on all your devices and keep them regularly updated.

Implement password security.

It can be easy to reuse the same password or constantly use similar ones, but that makes it easier for fraudsters to access your accounts. By having access to your accounts, they can apply for the loan without you even realizing it, leaving you to deal with the damages.