How to keep safe from an online scam

With today’s modern technology, there is an abundance of online scams floating around on the internet just waiting to ruin someone’s day. Scams target everyone and no one is necessarily more likely to become a victim of one, we’re all vulnerable to a scam at some point. An online scam succeeds because it looks like the real deal and catches you off guard. It also exploits your desire to be polite and respectful, as well as your generosity, compassion and good nature.

Therefore, it is very important to know what to look out for when using the internet. While scams disguise themselves deceivingly well, if you know what to look for, you’ll be able to reduce your risk of falling into their trap. This is why we have put together a few tips on how to detect and keep yourself safe from an online scam.

What is an online scam?

An online scam refers to any type of fraud scheme that uses email, websites, chat rooms, or message boards to present fraudulent solicitations to prospective victims. Scammers do this hoping to conduct transactions that will either benefit them individually or transmit the proceeds of that fraud to financial institutions.

Online scams are dishonest schemes that seek to take advantage of unsuspecting people to gain a benefit. They are criminal offences that apply to fraud. Criminals will try to use a combination of technical and social tricks in an attempt to steal money, data or identities.

Generally, if you come across an advertisement or an offer that you haven’t sought out yourself and it seems too good to be true, it probably is.

How to detect an online scam

Scammers have honed their craft over years of trial and error. They’ve learned what works on people and have adapted this into a master disguise. Here are some ways to detect an online scam:

• Money is involved

  – You might get an email from a company that says you have won money, been left money, that your money is in danger or you may get caught up in a reshipping scam or phishing. Whatever the advertisement or offer says, it will always include an element of money. This should be your biggest indicator that it could be a scam you’re looking it. We know it’s nice to believe that we can just get sent thousands of dollars completely out of the blue but unfortunately life doesn’t work like that.

• It sounds too good to be true

  – Not all things are too good to be true but in the case of a scam, it probably is. There is a reason that great deals seem unbelievable, and it’s because they are. Scammers play on the fact that many people would love to make lots of money with little effort and so they dangle the bait of easy money right in front of you. This distracts you from the importance of protecting your personal and financial information.

• Phishing

  – This is a scam that normally comes in the form of an email. Scammers send out emails claiming to be from a valid financial/ eCommerce provider. This method of scamming uses fear tactics to entice the victim into visiting a fraudulent website. The victim then logs into their account once on the website and enter sensitive financial information. The scammer uses this information to engage in credit card and bank fraud, or just outright identity theft.

Therefore, you should never give out your private banking information to a website or application that has been sent to you via email. When an accredited company asks you to release your bank information then it is okay to do so.

How to detect a loan scam

• A company will call or email you claiming to be a registered New Zealand company or a New Zealand Credit Licensee and say that you have been approved for a loan. They will also, more than likely, have a New Zealand phone number and address to appear more legitimate
• The company asks you to make upfront payments before they transfer your loan. They will tell you that this is to pay for things like insurance, tax or initial repayments. The company will most likely ask you to make these payments into a New Zealand or international bank account. Registered and legitimate lenders will never ask for any upfront payments.
• A company with a generic email address such as Gmail, Hotmail or Outlook contacts you. Another indicator is if the company’s email address looks like it is from a legitimate institution but is spelled incorrectly.
• You are approved for a loan amount that is higher than what you applied for.
• You are offered a low interest rate.

Things to check before getting a loan

• Check if the company’s name is on the A-Z list of all FMA warnings. If they are, steer clear.
• Check that you have been paired with a loan provider that is regulated by the FMA
• If the business is not based in New Zealand, find out who regulates them

Why loan providers ask for your bank details

There is a valid reason lenders and loan finders, such as Loans NZ, ask for your personal banking information. It is so they can access your statements and process your application much faster than banks. Instead of you emailing your bank statements from the past 3 months, you provide your login details and the lender can access them instantly.

We understand that when people need a loan, they need it fast. Which is why we have implemented such an advanced and secure system that speeds up the application process significantly. Obtaining information this way means that we are able to grant same day loans, unlike banks and some other loan providers. This means that instead of pulling your hair out, stressing for days waiting for approval, you only need to do this for a maximum of 60 minutes. It’s less work for you and far less stress as well.

When you provide your account information to the lender they will then use a secure third-party system to access read-only copies of your statements. It is quite a common system of obtaining information and it is completely secure, maybe even more so then manually submitting the statements yourself. This is because there are all sorts of hackers online that can pick up private information through your email. Submitting your information through this secure system actually minimises your risk of becoming a victim of a scam.

The lender will not have access to your account; it will only be able to see the information it needs to approve your application.

Is it safe to give my internet banking details to a loan provider?

Yes, it is!

• Lenders will not have access to your bank account and neither will the third-party service that facilitates the sending of the read-only copies of your bank statements
• The company will not store your login details
• The process of obtaining this information is encrypted and completely secure

Financial Governing Bodies New Zealand

1. FMA (Financial Markets Authority) – This is the New Zealand Government agency responsible for financial regulation. It is responsible for regulating all financial market participants, exchanges and the setting and enforcing of financial regulations. The information the FMA provides will help you ensure that the loan provider you are dealing with is completely legitimate.
2. IFSO (Insurance and Financial Services Ombudsman) – The IFSO resolves complaints about insurance and financial services. This is where you go when you have a complaint or concern about any financial institution you are having difficulty with.