There are a number of downsides to having unmanageable amounts of debt. And unfortunately, one result is that this debt makes many unsuspecting consumers vulnerable to being preyed upon by scam artists. This is something that a certain Tennessee woman found out the hard way.
Last November, a Knox County resident was scouring Google for a loan company that could help her consolidate her mounting debts. This woman was looking for a $10,000 consolidation loan to help her take control of her personal loans and credit card debt. A day later, the resident received a text message from a company who claimed they could help.
The text was from a man who claimed to work for Advance America. In reality, Advance America doesn’t offer loan consolidation; instead, they offer installment loans to their customers. However, the woman was unaware of this fact so it didn’t raise any red flags for her.
After being told she was approved for the loan, the woman called the phone number listed in the text message to receive more information. The man who answered informed her that he needed to run a credit check and asked for her banking information and Social Security number.
After supposedly running a credit check, the scammer called back to let the woman know her credit score wasn’t high enough to qualify for the loan consolidation. He said that he would have to pay $600 to someone named “Paco Verbitski” to adjust her credit score. After sending him $600 through a Moneygram purchased from Walmart, the woman was sent a confirmation of the transaction.
After realizing she had been scammed, the woman closed her accounts and added a fraud alert to her credit card. But unfortunately, she is still out that $600 and her financial issues are no closer to being resolved.
With the rise in student loan debt and growing number of credit card delinquencies, many individuals are turning to debt relief companies to help them find a way out. Unfortunately, this has given rise to a growing number of scammers; individuals who use popular search engines to target borrowers.
The company will charge hundreds of dollars with the promise of help but said help never arrives. This obviously has a detrimental effect on the consumer because they now find themselves in a worse financial situation than when they started.
To avoid these types of scams, it’s important that consumers always make sure that the company they are considering doing business with is legitimate. And the CFPB has issued warnings that consumers should never do business with a company that requires an upfront fee or asks for their personal banking information.
Additionally, extensive research is another safeguard for consumers looking for debt consolidation loans. There are plenty of reputable lenders out there that offer personal loans for this purpose, and they will have credentials, ratings, and other features that validate their credibility.
Author: Mike Brown
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