Advance fee fraud 17 july 2022 ( in Urdu audio ) English and Urdu text.

Beware of advance fee scams

Another fake job scam to a remote area in Lahore

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A triangular loan scam is a deceptive scheme where scammers profit by lending money to individuals while involving unrelated customers in the repayment process. Below is a detailed breakdown of how the scam works.

• The scammer offers loans to borrowers with minimal or no credit checks, targeting those in financial distress or with poor credit.
• At the same time, the scammer markets products or services to customers, often overpriced or of low quality.

1. A customer buys a product or service from the scammer.
2. Instead of paying the scammer directly, the customer is told to pay the borrower who owes the scammer money. This creates the illusion of helping someone repay a loan while completing a purchase.
3. The borrower, on the other hand, is obligated to repay the “loan” with high interest or additional fees directly to the scammer.

• Customer’s payment: The scammer collects payment for the product or service but avoids fulfilling customer expectations properly (e.g., delivering a low-value product).
• Borrower’s repayments: Borrowers are required to repay the loan with interest, often far exceeding the amount they originally received.

• Borrowers: They are burdened with unmanageable debt due to high interest rates or hidden fees. If they default, the scammer may seize collateral or harass them for money.
• Customers: They unknowingly fund the scammer’s lending scheme, often overpaying for products or services or receiving nothing of value.

1. A scammer sells an “educational course” for $1,000. Instead of asking the customer to pay them directly, they instruct the customer:
   • “Pay the borrower who owes us $1,000 as part of their loan repayment.”*
2. The borrower previously received a $500 loan from the scammer but now owes $1,500 with interest.
3. The scammer collects both the customer’s $1,000 and any additional payments made by the borrower.

• Fake Charity Loans: The scammer claims, “Buy this product, and your payment will help someone repay their loan.”
• Multi-Level Schemes: Borrowers are pressured to recruit new borrowers or customers, creating a pyramid-like structure.
• Online Platforms: Fraudulent websites or apps connect customers to borrowers, taking fees or keeping a cut of transactions.

1. Unusual payment arrangements (e.g., “Pay someone else instead of us”).
2. Lack of transparency about loan terms or product/service quality.
3. Promises that sound too good to be true, like “no credit check loans” or “guaranteed approvals.”

• Consequences: These schemes are often illegal and violate consumer protection and lending laws.
• Prevention:
  1. Avoid businesses or platforms with vague or unusual payment methods.
  2. Research lenders and sellers for legitimacy before engaging.
  3. Verify loan terms and product/service authenticity.

This scam exploits both borrowers and customers by funneling money through a deceptive payment system. Borrowers are left with debt traps, while customers unknowingly fund the scammer’s fraudulent operations.

Loan scams are deceptive schemes where scammers exploit borrowers through fraudulent tactics, often targeting vulnerable individuals. Below is an overview of the types, methods, and warning signs of loan scams.

• How It Works: Scammers promise loans but require an upfront payment for “processing fees” or “application charges.” After receiving the fee, they disappear.
• Example: A borrower is approved for a $10,000 loan but is asked to pay $500 upfront. The loan is never delivered.

• How It Works: Scammers pose as legitimate lenders to steal personal and financial information such as Social Security numbers or bank details.
• Example: A borrower is directed to a fake loan website, enters their details, and becomes a victim of identity theft.

• How It Works: Scammers target individuals with poor credit by offering “guaranteed” loans. These loans include hidden fees, excessively high-interest rates, or impossible repayment terms.
• Example: A borrower gets a $2,000 loan but owes $3,500 within a month due to hidden fees.

• How It Works: Scammers claim to forgive or consolidate loans for a fee, often impersonating government programs.
• Example: A scammer charges $200 to process “student loan forgiveness,” but no action is taken.

• How It Works: Scammers create professional-looking websites or offices to appear legitimate, collecting fees or sensitive data from victims.
• Example: A borrower applies for a loan on a fraudulent website and loses both their application fee and personal information.

• How It Works: Fraudsters use peer-to-peer platforms to pose as borrowers or lenders, deceiving participants into making payments or sharing information.
• Example: A “lender” requests an upfront deposit on a platform, then disappears.

• How It Works: Scammers pretend to be debt collectors and threaten victims with legal action unless they pay immediately.
• Example: A borrower is told their loan is overdue and must pay via gift cards or wire transfers.

• How It Works: Borrowers are persuaded to refinance loans repeatedly, each time incurring new fees and higher interest rates, trapping them in debt.
• Example: A borrower refinances a $10,000 loan multiple times and ends up paying thousands in fees without reducing the principal.

• Fake Approval Promises: “Guaranteed” or “instant” loan approvals without verification.
• Pressure Tactics: Urging borrowers to act quickly with time-sensitive offers.
• Unusual Payment Requests: Asking for fees via gift cards, cryptocurrency, or wire transfers.
• Spoofing Legitimate Lenders: Using names, logos, and websites similar to real financial institutions.
• Unlicensed Lenders: Operating without proper registration to evade legal scrutiny.

1. Requests for upfront fees before loan approval.
2. No physical address or vague contact details.
3. Lack of transparency about loan terms or conditions.
4. Use of high-pressure sales tactics.
5. Unsecured websites or unofficial email domains.

• Verify Licenses: Check if the lender is registered with financial regulators.
• Research Reviews: Look up the lender online for complaints or scam reports.
• Avoid Unsolicited Offers: Be cautious of loans offered through cold calls, texts, or emails.
• Never Pay Upfront: Legitimate lenders deduct fees from the loan amount, not before.
• Inspect Loan Agreements: Carefully review all terms and conditions before signing.
• Use Official Channels: Communicate only through verified contact details or platforms.

• Stop Communication: Immediately cease contact with the scammer.
• Report the Scam: File complaints with:
  1. The Federal Trade Commission (FTC).
  2. Local consumer protection agencies.
  3. Financial regulatory authorities.
• Protect Your Finances: Notify your bank and monitor accounts for fraudulent activity.
• Secure Your Identity: Place a fraud alert or credit freeze if personal information was compromised.

Loan scams exploit both financial desperation and trust. Understanding their tactics, recognizing red flags, and taking preventive measures can help you avoid falling victim.