How to Recognize and Avoid Lending Institutions That Are a Scam

Lending Institutions - Complete Controller

After the holidays, many people suffer from what is called the “January cost.” This cost is what was incurred over the holiday season. Many people spend outside their means and are left with a debt. Because of this debt, the National Commission for the Protection and Defense of Financial Services Users called on the population to be careful with the alleged credit management companies that offer express loans without requirements. Check out America's Best Bookkeepers

The agency recommends only going to authorized lending institutions if they need financing to face the first month of the year if there were financial excesses in the holidays. They also may need financing to cover payments that are due they aren’t able to cover, such as property payments, utilities, and tuition.

Generally, companies that offer loans without any qualifications such as checking income or consulting the Credit Bureau, call attention through suggestive advertisements on TV or the Internet. However, once people request financing, they ask for a deposit or percentage of the total loan for management and administrative expenses. Once the deposit has been made, the company states that the credit is in the process of authorization without reaching its final delivery.

Sometimes they say that the credit did not process and that the deposit cannot be returned or change the location and disappear. These companies are not financial institutions, so the user cannot come against them legally if there is any disagreement or complaint.

To avoid this, you should ensure the lending institution’s identity and registration since it is much safer to go to authorized institutions. Also, do not be enticed by the apparent speed for the granting of credit offered by some companies, or deliver personal documents or credit or debit card data if you are not sure that it is a legitimate company. If you have a credit card, it is suggested that you use that to meet your expenses then pay it quickly.

When you are tempted to use an unverified lending institution because they offer loans with no qualifications or credit checks, that should be enough of a red flag. However, there are other things you can look for to know that they are a scam. Check out America's Best Bookkeepers

Upfront Charges

There can be fees for financing services such as document fees, app fees, etc.. These types of fees being required by a lending institution through digital applications are normal and expected fees. But if the lender requests money before they will process the loan that is a deposit or percentage of the loan, that is not normal. Besides administrative fees, you should not pay any other money upfront as no legitimate lending institution would charge these fees or deposits.

Offer Via Phone

While you can call a legitimate financial institution to process a loan application, you should be doing this online through a secured site. You should never give out your information over the phone to any lender that has contacted you unsolicited. Before you call any institution to complete a loan application on the phone, make sure they are legitimate and registered. Check out America's Best Bookkeepers

Wire Transfers

If the lending institution asks you to wire transfer or send money through a payment platform, they are not legitimate. A legitimate lending institution will not ask for deposits upfront nor for money to be sent via a wire transfer or through another payment platform. Under no circumstances should you send any money to anyone via wire transfers that you do not know.

National Registration

When it comes to borrowing money, you should always check out the lending institution to verify they are legitimately registered. You can also do other research to verify they have existed for a long time and didn’t just pop up recently. If you have any doubts about the legitimacy of the lending institution, don’t use them.

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