How to Protect Yourself from Scams
Last year over 50,000 scams were reported to the Better Business Bureau, representing a steady increase since data started being collected in 2015. You play a crucial role in safeguarding your personal and financial information. The first step is knowing how to spot common financial scam tactics and how to mitigate your risk.
In This Article
- How to Protect Yourself From Scams
- Protect Yourself From Advance-Fee Scams
- What To Do If You Are a Victim
Be sure the company is legitimate.
Scammers often try to collect personal and/or financial information from consumers 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.
You should be very suspicious if you receive a phonecall, email, or message asking 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 software in an email
- Confirm or change your password or login information
- Send money or ask for an advance fee to qualify for a loan or payment plan
If LendingClub ever needs to authenticate your identity, we may ask for the last 4 digits of your social security number and/or your date of birth. We will not ask for any other information.
Be on the lookout for the advance-fee scam.
An increasingly common type of consumer fraud is the advance-fee scam. Scammers will often target people with poor credit who have recently been declined for a loan. Victims of advance fee scams are tricked into sending money in exchange for the promise of a significantly large loan amount at a low interest rate. Here’s how it often works:
- A company you’ve never contacted before calls or emails you. This is a company you may or may not ever have heard of offering unbelievably attractive financing rates and terms.
- They ask you to purchase a prepaid debit card for several hundred dollars. Frequently, before you can get the financing, they’ll say they need to collect fees in advance that you can pay for by purchasing and giving them the number to a prepaid debit card from Steam®, Green Dot®, Vanilla Visa®, Google Play, or Apple iTunes.
- If you say you can’t or don’t want to pay the fee, they’ll say “No problem!” it can be added to your loan amount—then ask for your bank account information for the “deposit.” At this point they will create a pending transaction by depositing a fake check or fake ACH transfer to your account. When victims see this pending transaction for their loan amount, this makes the scam seem believable.
- They ask for the prepaid card number. Trusting the scam is legitimate, victims purchase the prepaid debit card and give the card number to the scammer who withdraws the money from the card. Unsurprisingly, the pending transaction for funds promised fails to clear.
> Pro Tip: If a loan offer comes out of the blue and 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.
Be suspicious if asked to wire money or buy gift cards.
Scammers ask for prepaid gift card numbers because the money is untraceable once it’s in their hands. Treat prepaid Visa card numbers like cash.
Apple warns 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. (Loan issuers make their money on interest payments, not by asking you to buy merchandise.)
> Pro Tip: At LendingClub, we will never ask you to send us any fees or money in advance before you receive your loan proceeds. And no loan broker or any other service is authorized to charge fees or request payments on our behalf.
- Don't pay money for the promise of a loan. Ignore any advertisement or hang up on cold callers guaranteeing loans in exchange for fees paid in advance.
- Be aware that LendingClub does not work with loan brokers. Anyone who wants to charge you a broker fee to facilitate a loan through LendingClub is likely to be a scammer.
- Remember that legitimate lenders will almost always check your credit status before offering you a loan. It is very uncommon for a lender to guarantee that you will receive a loan before you apply, especially if you have bad credit or no credit history at all.
- Be suspicious if you feel pressure to act immediately. If you’re being asked to send money or provide personal information to meet an offer “deadline” or act quickly without being given time to get your questions answered or consider your options, it’s probably a scam.
- Never send money, whether by prepaid debit card, wire or money order, before you receive the actual proceeds of the loan. Very few lenders will ask you to send funds in advance, and you will have little to no protection if you do so.
- Always make sure you are dealing with a reputable company before you give out sensitive financial information. Visit the company’s website, look for reviews online, or look them up with the Better Business Bureau.
- Make sure who you’re talking to someone who actually works for the company they claim to represent. If you have any suspicions, get the company's contact information directly from their website and call them to make sure you're dealing with the company you think you're dealing with. You can also check their website for information about common scams. In the past, some scammers have pretended to be the Better Business Bureau or another legitimate organization.
If you believe you're a victim of an advance-fee scam by someone posing as a LendingClub employee or its representative, take the following steps immediately:
- Call Member Support at 888-596-3157. We can verify the identity of LendingClub employees.
- Report the scam to the local police department and your state's Attorney General. You can also file a complaint about internet-related fraud with the Internet Crime Complaint Center.