Some red flags can tip you off to scam artists’ tricks. For example:
A lender who isn’t interested in your credit history. A lender may offer loans or credit cards for many purposes — for example, so you can start a business or consolidate your bills. But one who doesn’t care about your credit record should worry you. Ads that say “Bad credit? No problem” or “We don’t care about your past. You deserve a loan” or “Get money fast” or even “No hassle — guaranteed” often indicate a scam.
Banks and other legitimate lenders generally evaluate creditworthiness and confirm the information in an application before they grant firm offers of credit to anyone.
Fees that aren't disclosed clearly or prominently. Scam lenders may say you’ve been approved for a loan, then call or email demanding a fee before you can get the money. Any up-front fee that the lender wants to collect before granting the loan is a cue to walk away, especially if you’re told it’s for “insurance,” “processing,” or just “paperwork.”
Legitimate lenders often charge application, appraisal, or credit report fees. The differences? They disclose their fees clearly and prominently; they take their fees from the amount you borrow; and the fees usually are paid to the lender or broker after the loan is approved.
And if a lender says they won’t check your credit history, but wants your personal information, like your Social Security number or bank account number? Go somewhere else. They may use your information to debit your bank account to pay a fee they’re hiding.
A loan that is offered by phone. It is illegal for companies doing business by phone in the U.S. to promise you a loan or credit card and ask you to pay for it before they deliver.
A lender who uses a copy-cat or wanna-be name. Crooks give their companies names that sound like well-known or respected organizations and create websites that look professional. Some scam artists have pretended to be the Better Business Bureau, a major bank, or another reputable organization; some even produce forged paperwork or pay people to pretend to be references. Always get a company’s phone number from the phone book or directory assistance, and call to check they are who they say they are. Get a physical address, too: a company that advertises a PO Box as its address is one to check out with the appropriate authorities.
A lender who is not registered in your state. Lenders and loan brokers are required to register in the states where they do business. To check registration, call your state Attorney General’s office or your state’s Department of Banking or Financial Regulation. Checking registration does not guarantee that you will be happy with a lender, but it helps weed out the crooks.
A lender who asks you to wire money or pay an individual. Don’t make a payment for a loan or credit card directly to an individual; legitimate lenders don’t ask anyone to do that. In addition, don’t use a wire transfer service or send money orders for a loan. You have little recourse if there’s a problem with a wire transaction, and legitimate lenders don’t pressure their customers to wire money.
Finally, just because you’ve received a slick promotion, seen an ad for a loan or credit card in a prominent place in your neighborhood or in your newspaper, on television or on the Internet, or heard one on the radio, don’t assume it’s a good deal — or even legitimate. Scam artists work hard to make you think they're legitimate, so it’s really important to do your homework.
Dealing with Debt
If you have debt problems, try to solve them with your creditors as soon as you realize you won’t be able to make your payments. If you can’t resolve the problems yourself or you need help to do it, you may want to contact a credit counseling service. Nonprofit organizations in every state counsel and educate people and families on debt problems, budgeting, and using credit wisely. Often, these services are free or low-cost. Universities, military bases, credit unions, and housing authorities also may offer low- or no-cost credit counseling programs.
No legitimate lender will loan you money over the phone. Nor by e-mail. On-line applications are just an invitation to be scammed.
Never give account numbers CC#s debit card #s or any financial or personal information to anyone over the phone.
If you need to borrow money, go to a brick and mortar place that has been around for awhile. And keep all documentation. Sometimes even legitimate lenders will sell your information to anyone who asks.
These calls are likely not coming from a real bill collector or loan company. More likely, these calls are coming from cowardly criminals hiding behind a magicJack device plugged in at some God-forsaken corner of the world where there is Internet service. They simply use a magicJack device and your fear the same way a common thief uses a toy pistol hidden in the pocket of his overcoat to make a bulge that looks like a real gun.
You can verify that this is a magicJack number by searching for it at http://www.phonevalidator.com .
MagicJacks are readily obtainable both inside and outside of the United States. In India, for example, you can buy one for about $100 US and get a free phone number with just about any area code you want together with a year of free calling to the U.S. and Canada. See, for example,
http://magicjack.in .
It doesn't take long to turn a profit at that fee, even if only 0.1% of the people they call fall for a scam perpetrated by a user of the magicJack. When calls come from some scammer in India, earning $700 on a single scam pays for the magicJack several times over and leaves the scammer with what is considered there to be a handsome profit. And India has a corrupt government that doesn't cooperate with our government in arresting these scammers.
So in addition to the regular reporting channels, you might also report the abuse to YMAX Corp. YMAX Corporation is a fully-owned subsidiary of the company that sells magicJacks and is in charge of assigning telephone numbers to magicJack devices. I have seen reports that they are pretty good at responding to complaints and may be able to permanently shut off a magicJack device, if necessary, so that it can never be used again.
The YMAX Corp. main web page is at:
http://www.ymaxcorp.com
and their site giving information on how to lodge a complaint is at:
http://www.ymaxcorp.com/contact.html
Note that the page having information on how to lodge a complaint gives a clickable link to a "live chat" where you can make your complaint to YMAX Corporation.
You should also make a complaint to your state's attorney general's office, letting them know (if true) that the calls appear to be coming from a magicJack overseas, and that YMAX Corporation appears to accept subpoenas from government law enforcement for information that might be used to identify the scammers and at least shut them down.