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Beware of scam loan companies

It’s a sad fact of life that there are always going to be people who try to rip off others. We’ve just discovered that another company is using our name on their website and sadly they’re trying to trick people into handing over important and confidential information.

So I thought I would publish some advice on staying safe online and how to spot scam loan companies:

  1. Check that a company is FSA regulated before you apply. This means they have a code of practice that they need to stick to, and that they’re an established company rather than a pop up loan provider.

  2. Never give your bank details to a company in an application form. Once you’ve actually applied for a loan and spoken to a lender or broker, some will need to see bank statements to verify your income, but you should never give these details to a company you haven’t spoken to. If they’re not FSA regulated you should also avoid providing them with these details. Keep a record of what you’ve sent, so that if you are the victim of fraud you can show your bank where you sent your details.

  3. Information such as how long you have had the bank account, details of wage payments and direct debits are never needed in a legitimate application form. This information could be used for identity fraud and will never be needed in an initial application. A lender or broker will run a credit check when you apply for a loan, and this will provide them with most of the information they need. You might have to provide some extra details like the length of time you’ve been in your job, and send proof of address and income, but a reputable company will discuss this with you and explain why, and will be happy to discuss data protection policies with you.

  4. Never tell anyone information such as your PIN number or other passwords that are used to log in to your bank account or that your bank uses for identification.

  5. Remember, getting a loan or finance is a big commitment. A company that makes it too easy is likely to be a scam. You should be able to see contracts and terms and conditions, discuss your repayments and have time to consider the agreement before saying yes.

At Car Loan 4U we generally pay the finance direct to the dealer you’re buying the car from rather than your bank account. This means the only reason we will need to know anything about your bank account is if the lender needs us to check your bank statements as proof of income. This will never be at the first stage of the process. By the time this happens we will have spoken to you and you will most likely have a personal advisor working with you who will explain what we need and why.

If you are at all unsure, visit the FSA website for more information and search their register to check if the company is regulated by them.