Quick cash schemes happen when a victim pays money in anticipation of receiving something in return—typically a loan, gift or investment—and once they've paid up, they receive little or nothing in return. These schemes don’t target people with established credit history but rather those who have less options to get their hands on quick cash. Issues with little or no credit history, credit challenges and debt can make good people almost desperate to find a way out and in turn resort to less than conventional ways to do it.
While it can be tempting to take the bait when in a bind, you shouldn’t ignore warning signs that could end up costing you far more in the long run. Here are a few warning signs to look out for :
No Credit Check Required
If a lender is offering a loan and you have challenges with your credit, or no credit history at all, it might seem like a good idea to work with a lender that doesn't even care about your credit. Financial institutions and lenders with legitimate organizations will care about your ability to repay and this is overwhelmingly determined by your credit worthiness. Also, if they claim that credit history is not a factory in their lending process, and they still request your social security number and other personal information, RUN.
When it comes to matters of money and the security of your personal information you should be completely aware of who you're dealing with. If you haven't heard of a company or person that you're planning on doing business with, learn more about them. At the very least, run a quick internet search and check reviews. Better yet, check their information with the Better Business Bureau. Don't hesitate to reach out to your local bank, law enforcement office, or an attorney to attempt to verify the legitimacy of a lender.
Shady Business Practices
No brick and mortar location? No one available for you to meet with, or even talk to? Do they operate out of a P.O. Box or utilize mail drops without a street address? You should be wary of any organization that has no legitimate business model or structure. It is a requirement that lenders be registered in the states where they do business. If something seems suspicious check with your Attorney General's office to check their registration.
While these warning times may take time to research further, IT IS WORTH IT. Keep in mind that these schemes don't only target individuals for a cash payout. The cash they receive upfront might be a fix for now but once they have your personal information, the damage could be far greater.
As your local credit union, we're here to help. Whether you're looking for options to consolidate debt, or get started building credit, we want to get you moving in the right direction.