As a business owner, it’s normal to be constantly on the lookout for loan opportunities. But, as you do that, don’t wave off the fact that there might be scammers out there looking to swindle you.
Here’s update about an ongoing business loan scam
In August, the Federal Ministry of Industry, Trade and Investment alerted business owners about faceless groups that go about defrauding entrepreneurs under the guise of assisting them with loans.
According to the ministry, the fraudsters use names and emails claiming to be from the ministry to swindle people. Sadly, this is still happening.
Take note of these details to avoid falling prey:
- The group operates through a scheme tagged, “Federal Government 2017 empowerment loan for entrepreneurs (nationwide),” to defraud unsuspecting members of the public.
- They use an electronic mail cloned with the name of the Federal Ministry of Industry, Trade and Investment to ask prospective applicants to pay certain amount to register or apply for the loan.
- The faceless group has one Jude Indiana with a phone number 08039505131 serving as front with ministryoftradeandinvestment@gmail.com as its email address.
- The ministry does not have any of such programme and is not in any way connected with the advert.
- All relevant information about the ministry is available on the website www.fmiti.gov.ng.
According to a statement by the ministry, security agencies have been informed about the development, and the masterminds of the scam are being tracked with a view to bringing them to book.
Tips for identifying potential scammers
A loan may be the answer to your financial woes. If approved, you get the money in a matter of days for whatever you need.
When going in search of loans, you must realise that loan scammers exist.
Loan scammers target small businesses just as they do individuals. Fraudulent operators might appear legitimate at first glance, presenting slick-looking ads and websites featuring made-up testimonials from happy customers.
Fortunately, there are some tell-tale signs that separate the scams from the real deal. Below is an overview of some red flags that you shouldn’t overlook:
- Money upfront: There is never any reason to pay a loan broker upfront. It doesn’t matter what reason they give, be it administration fees, processing costs or anything else. A loan broker should only ever get paid by the lender, in commission, after the deal is done.
- No contact information: Avoid lenders who don’t have a physical address or easily-found contact information. Even lenders who are solely online have clear and easy-to-find contact details and headquarter locations that indicate their legitimacy.
- Really, really good rates and terms: It’s sad to say, but if a deal looks too good to be true, then it probably is. Lenders are competing with each other and are constantly trying to offer better rates and loan conditions to attract more business, but they have limits as to what they can offer without losing money. If there’s one lender who seems to be offering a deal that exceeds other details by a long way, you may have cause to be suspicious.
- They guarantee acceptance, or anything else: No lender can guarantee that you will be approved for a loan. When a business offers customers a guarantee, that’s a binding promise they must deliver on. Without submitting your business application, you shouldn’t trust any guaranteed loan.
- Generic email addresses: If a business lender is emailing you from a Gmail, Hotmail, Yahoo or other generic email account, then something is off and you should tread carefully. Lenders should be conducting all business with an official business email address.
- Unsolicited services and contact: If a “lender” offers you a loan unsolicited, it may be a sign of a scam. Lenders don’t offer loans with a cold call. They might send promotional letters in the mail or display ads on your browser, but even those are based on some background information on you.
- The wrong type of loan: If you have a pretty good idea of what type of business loan you need but the lender wants to push you towards another option, you may want to be cautious. You might be being steered towards a product with higher rates or worse terms.
- A hard sell: Does your lender seem a bit too eager? Are they contacting you frequently, trying to rush you into a decision, offering free gifts or throwing around phrases like “limited time only” or “last chance”? Legitimate lenders make their money from offering sensible options that you can repay as planned. Scammers make their money by rushing people into bad decisions with big promises, and then running away with the money.
We hope this helped!
