Online Loan Scams

Online auto loans are commonplace these days. With thousands of lenders and financial institutions competing for your business, these companies can offer competitive rates. This often means you end up paying less than if you went through a middleman at a car dealership. However, there are an unfortunate number of dishonest people using the Internet to offer less than honest finance and are ready to make a quick buck off you.

Your online automobile loan could end up being a scam… The following are a few pointers that you should take note of before applying for your auto loan online.

The Scam.

You find an online automobile loan; you apply for it and are asked to supply personal details including your name, address and social security number. One of two things usually happens next, you are either rejected for the finance and the company retains all the information they need to carry out ‘identity theft’ on you, or you are approved for the loan.

If the latter occurs, the online auto loan company will then usually request a 5% deposit of the loan amount to secure your finance. You transfer the money in good faith. Then the applicant (you) are told that you have been fully approved and to go directly to the dealership with your loan approval papers. When you arrive, you realize that there is no approved loan and the car dealership has no idea who you or your automobile loan company are. You have lost your deposit (probably wired directly to a credit card through a money transfer scheme) and you still don’t have a car!

Why they Work.

Most of the sites that have been discovered as online auto loan scams are hard to spot as fraudulent because they go to a lot of trouble to look legitimate. They will normally have a professional looking logo, often display affiliations with other successful and trusted institutions and link themselves to reputable search engines such as Yahoo and Google.

Another method that disreputable companies will use is to send official looking documents via email that may even mimic your own financial institution’s stationery and make you believe it’s a genuine offer. Even Internet savvy people who are confident in online banking, stock trading and other purchases, have been known to fall for these sites.

How to Spot One.

Look for fake logos or lack of one altogether. If there is an affiliate link advertised, click on it and follow it to the source – it may be a dummy link. If you find the online auto loans site through a well-known search engine, you can use browser add-ons such as Site Advisor to determine the risk of the site. Past studies have shown that up to 9% of sponsored results contain Spam, spy ware or scams.

You can also look for visual clues to the viability of the auto loans company by searching for the padlock icon in your browser window. If this is displayed it means that the company offers Secure Sockets Layer (SSL) for the protection of customer’s personal information that is being transmitted via the site. If you can’t see the padlock, rethink going with that particular automobile loan.

Lastly, a good anti-phishing filter should alarm you to any sites that contain known hazards or spy ware. If it looks fishy stay away!

Be aware and be protected from these variants of online auto loans and make sure you are a hundred percent confident before giving away any money, or more importantly your personal details.