Tips to Avoid the Liars and Scammers of the Credit Industry

 

In the world of credit, there are plenty of people who are desperate to borrow money, and just as many people who are desperate to get back out of debt again. Given that, it’s not surprising that the industry is full of liars and scammers. Here are some to keep an eye out for.

 

1.  The debt advisors

 

Be very careful if you’re offered ‘free debt advice’. There are many government bodies, legitimate financial companies and charities that give good advice, but the ones who do a lot of advertising tend to be owned or partnered with people you don’t want to know. If the advice you get is to sign up for another loan from one company in particular, don’t believe it – the chances are that the person you’re talking to is just a salesman in disguise.

 

Of course, there are many debt advisors who are perfectly legitimate, so I can’t indict everyone in this industry.  Just watch out before you sign any papers or turn over any money.

 

2. The identity thieves

 

If you don’t keep track of your credit card statements and your credit report, then you could be in for a surprise. It’s not that hard for someone else to apply for a credit card, pretending to be you, or to get the number of a card you already have and start buying things with it. Then, of course, they get free money, and you’re left with the debt, not to mention the black marks against your name when it doesn’t get paid back.

 

Yes, you can dispute the charges (as long as you catch it in time, most cards require notification within 30 days of the statement, some may be even less), but it’s still a lot of bother, you won’t be able to use that card number again, and the stress can be unreal.

 

3. The catalog card

 

This is a scam that’s especially common around Christmas time. A company offers you a ‘credit card’, with a much higher limit than you’d usually qualify for. The catch, of course, is that you can only use it to buy things from their catalog, at inflated prices. This is nothing but a clever way of offering you expensive financing on purchases from them.

 

4. The only game in town

 

More exploitative lenders might realize that they’re really the only company that’s going to be offering some people any credit at all. They’ll send offers to desperate people for absolutely terrible deals, with the highest interest rates they can get away with, and no benefits whatsoever. These people will accept the offer without even reading it, relieved that finally someone out there offered them credit – and their debts get even harder to ever pay off.

 

5. The insurance charge