How to Spot & Avoid Financial Scams
Posted: June 22 2020
By: Daniela Bucay
As we shared near the beginning of the collective nightmare that is COVID-19, times of crisis always result in more scams. Even though stimulus checks have come and gone, many families and individuals not getting the help they needed during these difficult times, scams show few signs of slowing down.
Recently, we had the immense displeasure of seeing a fraud ring in the Philippines/Turkey use our name and images to defraud hardworking Filipinos. Although the scam in this case only affected people internationally (i.e., if you're in the U.S., you don't need to worry about Fake Fig ), it is a good example of how financial scams offering loans, a very popular type of scam, can happen to everyday people.
In this post, we will use our recent experience to highlight potential red flags and more ideas on how to spot and prevent a scammer from stealing your money.
Basics of the Scam
Based on the information that victims and potential victims have generously shared with us, here is what happened:
- Fake Facebook pages using our images and variations of our name were created, advertising loans. As you can see, we've highlighted the 3 ways to spot a "Fake" Facebook page: #1: Confirm the Facebook page has other sources of information #2: Confirm the number of likes and most importantly, #3: Page Transparency will tell you exactly how old the page is. Don't trust a page that is less than one year old!
- When potential victims commented on posts asking how they could apply, they received Facebook messages with instructions, including a request for loan information and a loan application, both of which you can see in the images below.
- As proof of the legitimacy of their page, the scammers would send photos of "badges" with the fake Fig employee's name and job title.
- After submitting the loan information and loan application forms, victims were told that they would need to send a transfer fee (although the scammers told them that the loan would have no other fees) in order to get the money sent from their international banks.
- Some people sent the transfer fee, which was a small portion of the total loan size (it's tricky because wire transfers can carry a fee). Others paused at this point and reached out to our actual Facebook page.
- Occasionally, victims would be sent an image of an alleged bank transfer for their loan to their bank accounts.
- Some victims reached out inquiring about their loan status after sending the transfer fee, only to be blocked on Facebook messenger (the primary form of communication for the scammers). Others still were instructed to send more money to cover additional fees, and after sending through a second deposit, got blocked.
Real Fig Facebook:
Fake Fig Facebook:
Big Red Flags
Some of us think we would never get scammed, however, it is important not to blame the victims of the scam. During times of crisis (i.e., a global pandemic), those of us who need help may overlook warning signs that in calmer days we would never ignore. Also, the fact that these scammers used images belonging to a legitimate business (our logo and images of our company members years ago at nonprofit events) and provided the "badges" we discussed above made it harder to spot the fact that it was fraud.
Hindsight is always 20/20, so let's break down what red flags victims may have missed in the scam outlined above:
no standalone website
The scammers only had a Facebook page. Every reputable lender we have checked has a standalone website, with the URL listed on their Facebook page. Remember, if you're taking a loan out online, your lender should have a website where they clearly lay out their rates, licenses, and requirements.
very few page likes
The fake Facebook pages had less than 100 likes, yet claimed to have helped millions of people. The real Fig Facebook page has thousands of likes, and still doesn't claim to have helped millions of people (yet).
If a company claims to have helped a large number of people, they should be able to point to reputable reviews (like we do, on Trustpilot and other review platforms), and there should be enough reviews to support the claims of a big customer base.
application process via email
We know of no licensed online lenders who accepts applications via email. Perhaps this practice is common and accepted internationally, but at least within the U.S., no reputable loan company can tender applications that way.
Sending this kind of sensitive information via email, without having any evidence that the email address belongs to a reputable organization (i.e., without seeing an external website and other markers of credibility previously discussed) is extremely dangerous, and we do not advise it! This is to say nothing of the fact that the emails the scammers sent had no letterhead, no link back to standalone website, or any of the other things you can usually find in an email sent by a legitimate business.
shady email addresses
As you can see in the email exchanges, the scammers used the email address "firstname.lastname@example.org" to fool victims into thinking they were talking to Fig Loans. Almost every single reputable business that conducts business via email has business emails where the domain name (everything after the @) matches the business name. All legitimate Fig emails will come from an email address that ends in @figloans.com
Not only should the business itself have an email where the domain name matches the business name, but also, no legitimate lender will ever have an employee reach out to you and provide their personal email address. In the badge photo we shared above, Aiza's employee badge (almost certainly a fake name and fake image) lists her personal email address.
requesting suspicious information
No lender should ask about religious beliefs, as the scammers did, or require that you list your place of employment, next of kin, or other personal information not directly related to the loan. Any requests for such information by an online lender should immediately sound alarm bells.
requiring a transfer fee
Reputable lenders do not charge you transfer fees for sending you your loan. If it costs money to send you the money for your loan, lenders either bake that into the cost of the loan (i.e., add it to your repayments in the form of fees) or pay it themselves as a regular operational cost.
Also, legitimate lenders will never ask you to send money through a peer-to-peer payment platform, like GCash, Venmo, CashApp, or the like.
How to Avoid Scams
We hope that the exhaustive dissection of how this one particular scam could have been avoided gives you guidelines on how to spot and avoid scams in your life.
As a reminder, here are the top things to remember if you want to avoid scams related to loans or other financial opportunities:
- If the lender found you via Facebook, check for a standalone website where you can verify their claims.
- Never submit a loan application over email. Reputable online lenders have you apply through their website or app.
- Do not send money to anyone claiming to be a lender before you receive a loan.
Have you ever been the victim of a scam? What steps do you currently take to protect your money and sensitive information from online scams? We want to hear your stories! Contact us at at email@example.com, Facebook, Instagram, and Twitter.