Internet Scam: Loan Intimidation

This scam uses fear and intimidation to work. People generally want to do the right thing, and scammers generally want to take advantage of that.

Almost 10,000 loan-intimidation scams were reported to the Internet Crime Complaint Center (a partnership between the FBI and National White Collar Crime Center) in 2011, costing victims more than $8 million. That's a lot of money. According to the IC3 report, “Victims often relay that they had completed online applications for other loans or credit cards before the calls began.” More than 50% of the victims tend to be under the age of 40.

How this scam works:

The potential victim will receive an email or phone call from a person who appears to be from a reputable government agency, company, or collections agency. They will tell the victim they are delinquent on a loan. Often the scammer will have correct social security numbers, date of birth, employment information (which they've gathered via identity theft techniques or purchased from other scammers). This will often trick the victim into believing this call or email must be legitimate when it is not.

Then the scammers may get aggressive - calling your home repeatedly, your work, and even relatives threatening legal action, arrests, and in extreme cases even physical violence. And all of this is made up. Scammers lie about everything. It's all part of their scheme to use intimidation to get their victims to act before they can think about what they are doing.



If you are contacted by a scammer that is using this technique and trying to collect a debt that you do not owe, you should:

• NOT send any money to anyone until you've done more research.
• Contact your bank(s) and credit card companies and have your account numbers changed.
• Contact the three major credit bureaus and request an alert be put on your file.
• File a complaint at www.IC3.gov.
• Contact your local law enforcement agencies if you feel you are in immediate danger.   

If you have received a legitimate loan and want to verify that you do not have any outstanding obligation, contact the loan company directly.


To read more about how to recognize scams and learn to avoid them (and deal with identity theft), see the series of books on Internet Scams Revealed on KTMObooks.com.