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article imageSocial Media Valuable In Promoting Public Awareness Of Loan Scams

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By Sharon Secor     Oct 1, 2012 in Internet
Active use of the Internet and participation in social media groups have been recognized as by the US Congress as powerful means of helping people to avoid being victimized by advance fee loan scams and other types of financial fraud.
Social media is a powerful force, reaching millions of people. The user-friendly design of the major social networking groups encourages users from all age groups and skill sets to communicate and to share information. That is exactly why social media has attracted the attention of government officials and consumer advocate organizations as a tool in the fight against advance fee loan scams. Knowledge is the best protection a person has against this type of financial predator. Social media plays two very important roles in raising public awareness by helping spread loan scam knowledge far and wide.
Advance fee loan scams, as recently reported by DirectLendingSolutions.com, continue to evolve, shifting their form, gathering a phony aura of legitimacy from what is in the public eye. When the government got involved in trying to help ease the foreclosure crisis, for example, advance fee loan modification scams began to proliferate. The site has been publishing people's loan scam experiences since 2007, and reading those first hand experiences clearly demonstrates that despite shifts in form and detail, the fundamental structure of an advance fee loan scam remains the same. These sorts of scams have become a financial industry scourge, moving government officials and consumer advocacy groups to action.
Congress requested that NeighborWorks America “to launch a national public education campaign” specifically regarding loan modification scams, according to the organization's web site. Social media is an important part of their efforts to spread advance fee loan scam information, along with numerous other groups throughout the nation that are spreading the message. There are two primary ways in which social media serves as a vital part of the campaign to increase public awareness, thereby reducing consumer vulnerability to these types of scams. The first is simply making people aware of the now classic structure of an advance fee loan scam.
Fake lenders target those likely to be unable to get a loan through the usual channels, due to a poor credit rating or a heavy debt burden. These are often unsolicited offers. Depending on the specifics of the scam, they may offer an unsecured cash loan, mortgage loan modification, foreclosure relief loan, or some other often desperately needed financial opportunity. In each case, however, the target will be asked to send money up front to cover fees, such as loan insurance, or some other loan related payment. Often, the target of the scam is asked to send the money via wire transfer, like Western Union or MoneyGram. A recent twist is to ask money to be transferred by Green Dot MoneyPak. Scammers like to stay current.
Because of the reach of social media, these details are spreading quickly. Public awareness is increasing and people are starting to recognize the signs and stop before it is too late. The public is also learning more about identity theft, something that also can happen when getting involved with these types of scam artists. Even if, ultimately, they do not get money from a person, the personal information that scam artists gather during the fake loan application can cause trouble for an individual later on down the line, if the scammer uses that information to set up credit cards or loans in the person's name.
There is another, more subtle, but vital way that social media has been a valuable part of the effort to prevent advance fee loan scam criminals from preying upon people. When taken advantage of, people are often too embarrassed to call the police. They keep it a secret because they are ashamed of having been fooled. Well, that secrecy only helps the scammers move on to the next target. However, social media can be very supportive of people. They can see that they're not the only ones that have been victimized, and can feel encouraged to tell their story, too. Even a person too embarrassed to call the police may feel comfortable telling their story. They may even, after reading about other people, feel less embarrassed and decide to contact police.
According to news reports, Nevada State Attorney General Catherine Cortez had the pleasure of doing something very rare in the world of advance fee loan scams. On August 8, 2012, the Associated Press reported that she was able provide advance fee loan modification scam victims with full restitution via her successful prosecution of the perpetrators. That happened because people had the courage to come forward. In addition to getting their money back, they have helped to raise public awareness on the issue, probably helping others to avoid being taken in by this type of scam.
Social media can be a powerful force for good. It shows its value every day in helping to spread awareness about the important issues of the day. And, the users of social media should be congratulated. It is their participation that makes it all happen. Make sure everyone in your network is familiar with advance fee loan scam information, including the connection these scams have with identity theft. The more people know, the less vulnerable they are.
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