Watch Out for Fake Loans on Social Media

Scams are, unfortunately, a part of everyday life. Increasingly, fraud is taking place online and on social media platforms. That is also true of loan scams.

How loan scams on Facebook, Instagram, and other social media platforms work

A typical loan scam works like this: Scammers create fake profiles on Facebook and other social media networks, and tweak these profiles until they appear credible. Alternatively, scammers may also hack genuine social media accounts and use the profiles for their criminal purposes.

The scammers then write people on social networks or contact people who are looking for loans indirectly via classified ads platforms using their fake profile. Loan scammers also advertise using Google’s advertising network and other online platforms.

Loan scammers attract victims by offering exceptionally affordable loans, such as loans with annual interest rates of two percent for a three-year term, without a credit check. A comparison with personal loans from genuine lenders quickly reveals that loans like that are not realistic. Scammers either pretend to be lenders themselves, or refer you to a supposed lender from which you can supposedly get a loan. In some cases, scammers fraudulently misuse the names of well-known banks for their scams.

Next, the scammers request personal information and a fee or deposit in order to provide the loan. Of course, the victim never sees the promised loan, and the fee or deposit is never repaid. This kind of scam is referred to as an advance-fee scam.

The following tips can help you avoid falling prey to loan scammers on social networks:

• Be skeptical when you come across loan offers with exceptionally low interest rates. Get informed about the actual interest rates for real personal loans from Swiss banks.
• Do not trust sources that actively offer you loans on social media, regardless of what the conditions look like. Reputable lenders do not actively approach social media users.
• Protect your social media accounts with a secure password. Choose a code with at least 12 characters composed of letters, numbers, and other symbols. Change your password regularly.
• Never share personal information with strangers on social media channels.
• Inform the operators of the social network (Facebook, for example) when you discover fake profiles. Block the fake profiles in your account.

If you ever do become the victim of a loan scam, report the incident to the police as soon as possible.

More on this topic:
Compare Swiss personal loan offers now
Useful tips for getting loans in Switzerland
Online loans in Switzerland explained
The costs of loans explained