What Are Loan And Investment Funding Or Financing Scams?

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What Are Loan And Investment Funding Or Financing Scams?

Post by Roxy »

Loan, investment funding and project financing scams are scams that offer personal loans, business loans, auto loans, and mortgages which are very easy to apply for and they are usually offered with below-market interest rates.

Some loan scams may also involve the loan scammer saying they are offering brokerage fees and commissions in exchange for introducing clients to them who also want to borrow money.

These loan scams may also be backed up by a fake loan-company website controlled by the scammer or the scammer may provide a link to the website of a real loan company in order to try to spoof people into believing that they are making contact from a real loan company.

Another type of loan scam are those claiming to be private money lenders. Using this modality the scammers will not say they have a company since they claim to be a wealthy private individual wanting to lend out money. In the real world there is no such thing as a rich person who sends out random emails to people saying that they want to give you a loan. This never happens in reality. It is always a scam.

Other types of loan scams involve the scammers acting as an investment company that is offering money for project financing and/or other forms of investment financing where the scammer claims to be seeking a certain percentage of ROI (return on investment) in exchange for providing the so-called funding. These project funding scams may also be backed up by a fraudulent investment company website too. Many of these scammers claim to be located in the UAE in either Dubai or Abu Dhabi.

In all cases these so-called loan offers will be made very easy to apply for in the sense that they will only require a very minimal amount of application documentation. Often the scammer may only ask for a few lines of personal information to be sent back within the body of an email and without even requiring any forms to be filled out. They also will not require that any assets be placed by the borrower as collateral for the loans and so they are basically all "unsecured loans". Loans in the real world don't work like this. There is rarely such a thing as an unsecured loan unless the borrower has a very strong credit rating and/or already has a line of credit established with a major bank. Regardless, the interest rates charged on unsecured loans will always be much higher than the low interest rates being offered by loan scammers.

In other cases scammers talk about offering "Soft Loans". A soft loan is a loan with no interest or a below-market rate of interest. Also known as "soft financing" or "concessional funding", soft loans have lenient repayment terms, such as extended grace periods in which only interest or service charges are payable and with interest holidays. They typically offer longer amortization schedules (in some cases up to 50 years) than conventional bank loans. Soft loans are typically made by multinational development banks, affiliates of the World Bank, or by federal governments (or government agencies) to developing countries that would be unable to borrow at the market rate. However, soft loans are never offered by small lending institutions and provided as small-business loans and/or to individual borrowers for personal use.

With many of these loans scams the scammer will make contact using a free webmail email address such as from Gmail, Hotmail, Yahoo, AOL, MSN, Outlook, etc. A real loan or financing company will never communicate using a free email address like this. Real people working in a professional capacity will almost always have an email address associated with their company's internet domain.

All of these scams will eventually involve the scammer requiring an up-front fee to be paid in advance to the scammer in order to obtain whatever non-existent loans and/or project funding the scammer is offering. The up-front fees may be proposed as loan processing fees, loan origination fees, insurance costs, performance bond fees, surety bond fees, guaranty bond fees, indemnity bond fees, etc and any money paid to a loan scammer for any of these types of fees will be lost by the victim.

During the course of the scam the scammer may ask you to contact 2-3 different people that the scammer claims are also involved with the transaction as a psychological technique designed to make the transaction seem more legitimate. In most cases though you are dealing with only one scammer who is acting behind all of the various different personas being presented.

Loan scams are known as a form of Advance-Fee Fraud. Advance-Fee Fraud is best described as an offer of money, merchandise, services, employment, or even romance, but where the victim is asked to pay a fee in advance to obtain whatever is being promised to them by the scammer. The main scam strategy of all advance-fee fraud scams is to try to persuade the victim to send money, and then continue to send more money to the scammer, as many times as possible, until the victim eventually runs out of money and/or goes into debt as a result of losses from the scam. And in the end, the victim only loses their money and never receives any of the money at all being promised by the scammer.

Please click here to read more about the psychological techniques used to deceive people with Advance-Fee Fraud scams. The following article on Wikipedia also explains more about Advance-Fee Scams in general: Wikipedia Link

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