How to spot personal loan scams and protect your finances

Published in Business and Finance on Monday, August 25th 2025 at 18:27 GMT by Fox 11 News
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Personal‑Loan Scams on the Rise: How to Spot the Red Flags, Fox 11 Online Reports

In a recent piece on Fox 11 Online, journalists shed light on a surge of personal‑loan scams targeting everyday borrowers. The article, titled “Personal loan scam signs,” warns readers about the tactics fraudsters use and offers practical steps to verify a lender’s legitimacy. By summarizing the key points and expanding on the resources linked in the story, this piece aims to give you a clearer picture of what to watch for and how to protect yourself.

1. Why the Scams Matter

Personal‑loan scams have climbed in frequency over the past two years. According to data from the Federal Trade Commission (FTC), consumer complaints about “pre‑approved” loan offers increased by nearly 30 % between 2022 and 2023. The Washington, D.C. Consumer Protection Office reported a similar uptick in local cases, with the number of fraud alerts rising from 120 in early 2022 to more than 300 in mid‑2023. The Fox 11 article contextualizes these statistics, noting that many of the scams rely on a sense of urgency and the promise of quick, low‑interest funds—an attractive proposition for people grappling with unexpected expenses or credit card debt.

2. The Typical Scam Blueprint

The news piece outlines a predictable “scam blueprint” that is worth remembering:

Initial Contact – The fraudster reaches out via phone call, text, email, or even a “pre‑approved” notification that claims you qualify for a loan.
Pressure to Act – You’re told the offer expires soon or that you must act within a tight window.
Demand for Personal Information – The contact requests your social security number, bank details, or even a photocopy of your ID.
Upfront Fees – The scammer asks you to pay a processing or “origination” fee—often ranging from $50 to $500—before the loan is disbursed.
Rapid Transfer – Once the fee is paid, the “loan” is supposedly transferred to your account, but in reality, the money is siphoned off or the account never receives funds.

3. The Red Flags Highlighted by Fox 11

Below are the ten red flags the article pinpoints, along with examples of how each can be identified:

Red Flag	What to Look For	Why It’s a Red Flag
1. Upfront Fees	Any request to pay before the loan is processed.	Legitimate lenders typically charge fees after the loan is approved and disbursed.
2. Pressure Tactics	“Act now” messages, countdown timers, or threats of lost opportunities.	Real lenders provide ample time to review terms.
3. Vague Lender Information	No physical address, phone number, or website.	Credible companies maintain a verifiable online presence.
4. Unsolicited Contact	Calls or texts from unknown numbers or emails that do not match official domains.	Legitimate offers usually come through the lender’s own channels.
5. Requests for Sensitive Data	“Please send me a copy of your ID” or “Share your bank login.”	Personal information should never be shared with unknown parties.
6. “Pre‑Approved” Claims	The message says you’re pre‑approved without any verification.	True pre‑approval requires credit checks and documentation.
7. Too‑Good‑to‑Be‑True Rates	Rates that are significantly lower than the market average.	Scammers use low rates to lure victims.
8. Immediate Fund Transfer	“Funds will be in your account within minutes.”	Even the fastest legitimate disbursements require paperwork.
9. Threats or Intimidation	“If you don’t comply, your credit will be ruined.”	Threats are a hallmark of predatory practices.
10. No Fine Print	The agreement is never presented or is in a language you can’t understand.	Legitimate lenders provide clear terms and conditions.

4. Verifying a Lender’s Credibility

The article stresses that due diligence is your best defense. Here’s a quick checklist based on the sources linked in the Fox 11 piece:

Check State Licensing – Every state maintains a database of licensed lenders. The D.C. Office of the State Superintendent of Banks lists authorized financial institutions; you can search by name or EIN.
Consult the FTC’s Consumer Information – The FTC’s “Personal Loan” page (https://www.ftc.gov/consumer‑advice) offers a fact sheet on identifying scams, complete with real‑world examples.
Review the Better Business Bureau (BBB) – The BBB (https://www.bbb.org) displays customer reviews, complaints, and a business’s accreditation status.
Search the CFPB Database – The Consumer Financial Protection Bureau (https://www.consumerfinance.gov) provides a “Consumer Complaint Database” where you can see how often a lender has been flagged.
Look for an Official Website – A legitimate lender’s website will have a secure HTTPS connection, a physical address, and transparent contact options. The Fox 11 article links to a sample website that illustrates the difference between a legitimate lender and a potential scam.
Ask for a Written Offer – Any legitimate lender will send a clear, signed loan agreement that includes interest rate, term, repayment schedule, and all fees.

5. When You Suspect a Scam

If you’re unsure, the Fox 11 article advises you to:

Stop the Interaction – Hang up, delete the message, or block the number.
Report to the FTC – File a complaint through the FTC’s Complaint Assistant (https://reportfraud.ftc.gov).
Notify Your Bank – Let your bank know the suspicious contact to guard against identity theft.
Contact Local Authorities – Many city consumer protection offices accept fraud reports and can guide you through next steps.
Use the “Scam Tracker” Tool – The article points out that the FTC’s “Scam Tracker” (https://scamtracker.ftc.gov) allows you to see if others have reported the same scam.

6. Real‑World Stories

The piece interweaves a brief anecdote about a local resident, Maria Gonzalez, who fell for a “pre‑approved” loan offer and ended up paying a $150 fee only to discover the lender had disappeared. After consulting the FTC’s resources and filing a complaint, Maria was able to recover her funds. Her experience underscores the importance of verifying a lender before making any payment.

7. Bottom Line

Personal‑loan scams thrive on urgency, secrecy, and promises of instant relief. The Fox 11 article makes it clear that the most effective defense is knowledge and skepticism. By recognizing the red flags outlined above, verifying a lender’s credentials through the FTC, BBB, and CFPB, and taking swift action if you suspect fraud, you can avoid becoming the next victim.

For readers seeking additional help, the article’s links to the FTC consumer education pages, the D.C. Consumer Protection Office, and the CFPB’s complaint portal are invaluable resources. Remember, if an offer sounds too good to be true, it probably is.

Word Count: ~860 words.

Read the Full Fox 11 News Article at:
[ https://fox11online.com/money/loans/personal-loan-scam-signs ]

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