How to Protect Yourself from Scams
New FTC data shows more than 2.8 million people filed fraud reports in 2021 amounting to more than $5.8 billion in losses—a 70% increase over the previous year. Imposter scams, such as the advance-fee loan scam, were the most commonly reported.
Your ability to spot common advance-fee loan scam tactics, protect yourself, and reduce your risk of exposure are all critical to ensuring the safety and privacy of your personal and financial information.
In This Article
- How to Protect Yourself From Scams
- Protect Yourself From Advance-Fee Scams
- What To Do If You Are a Victim
Check the company is legitimate.
Scammers will often try to collect your personal and/or financial information by posing as employees of philanthropic organizations or financial services companies. Be cautious about providing personal or financial information to anyone, even if they claim to be from a company you already do business with. It could lead to identity theft.
Be on the lookout for foul play if you receive a phone call, email, or message from anyone who asks you to take any of the following actions:
- Provide your bank account number, Social Security number, or date of birth
- Disclose your credit card or debit card information
- Download a document, file, or software sent to you in an email
- Confirm or change your password or login information
- Send money or ask for payment of any "fees" upfront to qualify for a loan or payment plan
If LendingClub ever needs to authenticate your identity, we may ask you for the last 4 digits of your social security number and date of birth. We will not ask for any other information.
Watch out for the advance-fee loan scam.
The most reported category of consumer fraud is known as imposter scams—with the advance-fee loan scam being the most common. Scammers will promise a loan or credit card regardless of your credit history, often targeting those with low credit scores or have had trouble getting a loan or credit for other reasons. But they want you to pay a “processing” fee or other fee first. Advance-fee loan scammers trick unsuspecting consumers into sending money in exchange for the promise of a significantly large loan amount at a low interest rate.
Here’s how the advance-fee loan scam typically works:
- A company posts an ad online or contacts you by phone, email, text, or social media. Scammers posing as legitimate banks or lenders (that you may or may not already be doing business with) will offer you unbelievably attractive credit financing rates and/or terms. Scammers typically will post ads online, send you emails, or call you with “deals.”
- You're asked to purchase a prepaid debit card for several hundred dollars. Frequently, you’re told that before you can receive financing, you will need to pay “processing” or other fees first. You’re told you can easily pay these advance fees by purchasing a prepaid debit card from Steam®, Green Dot®, Vanilla Visa®, Google Play, or Apple iTunes, and then giving them the number on the card.
- If you refuse to buy a prepaid card, they say the fees can be easily added to your loan amount. If, at first, you refuse to buy a prepaid card, scammers will try again to gain your trust and tell you their fees can be added to your loan amount, and, subsequently will ask for the bank account where you want your “funds" deposited. Once they have your bank account information, scammers will initiate a pending transaction by depositing a fake check or a fake ACH transfer into your account. Scammers know their victims are more likely to believe the scam if they can see the pending transaction for the fake funds transfer.
- You're asked to buy a prepaid card for "fees" again. Trusting the scam is legitimate after seeing the pending fake funds transfer, scammers will try talking you into purchasing and giving them the number to a prepaid debit card again, this time under the guise of being able to more “quickly and easily” pay their fees. Once the scammer has the prepaid card number in hand, the money is withdrawn from the card, the pending funds transfer transaction fails to clear, and the scammer disappears.
> Pro Tip: If a loan offer seems too good to be true, it probably is. Advance fee scammers know that people who feel desperate are not only more vulnerable, but more likely to believe the scam.
If you're asked to wire money or buy gift cards, suspect foul play.
Scammers ask for prepaid gift card numbers because, once it's in their hands, the money is untraceable. Treat prepaid Visa card numbers like cash.
Apple has warned consumers that Apple gift cards can be used only to buy merchandise at Apple’s website or stores. Likewise, Google Play gift cards can be used only on the Google Play website, and Steam cards can be used only at Steam. And remember that lenders make money by collecting interest payments, not by asking you to buy merchandise.
> Pro Tip: At LendingClub, we will never ask you to send any fees or money in advance before you receive your loan proceeds. Also, no loan broker or any other service is authorized to charge fees or request payments on our behalf.
- Never pay money for the promise of a loan or credit card. Ignore any online ad and hang up on cold callers who attempt to guarantee loans or credit in exchange for “processing” or other fees paid in advance.
- Be aware that LendingClub does not work with loan brokers who charge fees. Anyone who attempts to charge you a broker fee to facilitate a loan through LendingClub is likely an imposter—not someone who actually works for LendingClub.
- Legitimate lenders will check your credit before offering you a loan. It's uncommon for a lender to guarantee you'll receive a loan before you complete and submit an application, regardless of your credit history.
- Be suspicious if you're pressured to act immediately. If you’re asked to send money in advance, provide personal information to meet an advance-fee loan offer “deadline,” or pressured into acting quickly without being given time to ask questions or consider your options, it’s probably a scam.
- Never send money, whether by prepaid debit card, wire or money order, before receiving your loan proceeds. Very few lenders will ask you to send funds in advance, and you will have little to no protection if you do so.
- Be sure the company is reputable company before sharing personal financial information. No matter who you're dealing with, always visit the company’s website, look for customer reviews online, and check out the company thoroughly with the Better Business Bureau or other business accreditation service.
- Make sure you’re not talking to an imposter. If you suspect the person you’re dealing with is not from the company they say they’re from, hang up and call the the company directly (get the number from their website) to confirm the offer details. You can also check the company's website for information about common scams. Imposter scams are the most commonly reported, and scammers are known to pose as anyone from the Better Business Bureau to the IRS.
If you believe you're a victim of an advance-fee scam by someone posing as a LendingClub employee or its representative, here's what to do:
- Report the scam immediately to LendingClub Member Support at 888-596-3157. We will take in your information, verify, investigate, take any necessary action, and provide you with additional guidance.
- Report the scam to the local police department, your state's Attorney General, and file a complaint about internet-related fraud with the Internet Crime Complaint Center.