Credit facilities make life easier for many people. However, the industry is one that is awash with lots of scams. This article takes a look at eight of them.
Credit repair scams
A legitimate credit company in the UK will comply with the provisions of the Financial Conduct Authority. It will be in your best interest to avoid a credit company that –
- Requires payment before delivering services
- Conceals your rights- including those on disputing items on your credit cards yourself
- Makes unrealistic promises such as deleting everything from your credit reports.
The Credit sweep scam – just as credit identity scams, criminals who promote this scam pose as credit repair companies with promises to alter your credit card information to suit your preferences. Experts say its impossible to erase your credit card’s history and anyone promising to do so should be avoided.
Advance-fee loan –Advance-fee loan fraud typically entails a lender making false commitments to arrange low credit. It is common among such criminals to ask for upfront fees from cardholders to arrange these bogus loans. No legitimate company will give low-interest loans to people with poor credit, hence when next you receive this commitment from an agent, don’t forget to flee.
Credit insurance – this scam occurs when fraudulent companies make commitments to offer credit insurance at a lower premium in ways legally backed loan companies would typically not do. Unfortunately, such companies renege on their commitments after collecting premiums – especially if the client fails to pay off a loan. Make sure you research thoroughly before employing the services of a credit insurance company.
Authorised billings – this scam occurs when companies introduce new charges or raise their monthly fees without properly notifying their clients. Make sure you are very diligent with your bills and credit card statements. Creating time for this helps you notice any discrepancies sooner. It can be a good idea to choose a credit card which comes with an app, such as B, which can help you easily track your outgoings and fees.
Phishing – this scam process attempts to acquire valuable information such as passwords, credit cards details and usernames by duplicating genuine websites or pretending to be reputable organisation and luring victims into divulging sensitive information.
Online Dating Site Fraud – most dating sites require payment of fees by users. The means of payment requires users to input their credit card information which makes it very easy for these sites to defraud them. Make sure you thoroughly investigate a dating site before paying for their online services.
Lottery Scams – scammers use emails to notify victims of a contest or lottery they won without their participation. The emails require victims to pay a minimal amount using their credit cards to access their prices. Scammers collect this information and disappear. Legitimate lottery operation will not request such information from you.