How to Recognize Lending Fraud
Lending fraud scams often target elderly and low-income consumers with their "too good to be true"loans. Unfortunately, loans that seem to be too good to be true usually are. Loans especially prone to abusive lending practices include payday loans, tax refund loans, and overdraft loans. While these represent some of the more obvious types of abusive lending, lending fraud can occur with practically any type of loan, including: home construction, improvement, or mortgage loan; automobile, boat, or other vehicle loan; land loan; vacation loan; education loan; and personal loan.
Lending fraud is typically marked by the following characteristics:
- Loans that come with balloon payments, high or daily interest rates, excessively high or low monthly payments, pay-off or prepayment penalties, and/or automatic refinancing
- Guaranteed loan approval regardless of credit history
- High-pressure sales tactics
- Hidden loan fees and/or costs
- Unsigned or blank forms that the lender fills in or alters later
- Insufficient disclosure
Lending fraud is a serious problem that costs consumers more than $25 billion annually. If you have been the victim of lending fraud, you should report your claim to your local consumer affairs agency or the Federal Trade Commission immediately. By reporting a complaint, you can potentially save others from being the victims of the same or similar lending fraud scams. You may also wish to contact an experienced consumer fraud attorney who can evaluate your claim and help you understand your options. You may be able to participate in a consumer fraud class action lawsuit, which will help you obtain compensation for your financial losses and more.
