What is credit fraud? The procedures of credit fraudsters

Credit fraudsters inflict financial harm on other people, institutions or companies by acting as either a broker, lender or borrower. New approaches are constantly being found, and in many cases new media are playing an increasingly important role in large-scale credit fraud.

The damage caused by credit fraud is enormous, millions of dollars are stolen every year. The victims are dependent on the fact that the fraud can be investigated, that the fraudster can be proven guilty and that the claim for damages can be collected from the fraudster at all. In many cases, the victims are left empty-handed and have to actually write off their damage.

In addition, there seems to be a high number of unreported cases of credit fraud – very many cases do not even go on record, the fraudsters come, especially if they cheat private individuals, often for a long time unscathed because the victims are not informed. In many cases, this is also due to the behavior of the perpetrators and the often very professional “social engineering”, that is, the skillful deception and the exploitation of personal fears of the victims of fraud.

If you want to be on the safe side, you should take a look at our loan providers before taking out the loan in order to avoid damage from credit fraud.

How credit criminals act

How credit criminals act

In these cases, the basic pattern is always designed in such a way that the fraudster promises his victims to broker or grant a loan, which he never actually intends to do and usually cannot. It is primarily about “upfront fees” that the alleged intermediary or lender wants to collect from the victim, with the promise that the credulous victim will then receive a loan. Those who are unable to obtain credit from banks due to low income, old age or poor creditworthiness are particularly harmed here.

Fictitious loan commitments are designed to make the victim think that all they have to do is transfer the “loan fees” and then get the loan. The fact that in many cases this approach affects people who are already financially very poorly placed makes the fraud crime all the more serious. All of these approaches also indicate commercial credit fraud from the outset, which also significantly increases the sentence.

Most credit providers work properly. A characteristic of this is, for example, that no upfront credit fees are charged, i.e. non-performance commissions. The credit request should be free of charge. Only with a positive decision and the conclusion of an actual loan contract, fees (within the monthly installments) may apply.

Credit check

Credit check

The fraudsters often advertise under the label “Credit Bureau-free credit”. For serious credit intermediaries, this means loans from foreign, mostly Swiss, banks – there is actually no Credit Bureau check here because foreign banks actually have no access to Credit Bureau.

For this purpose, other credit checks are carried out, and the income requirements are usually very high, because of the high risk for the funders, usually also the interest.

However, dubious providers and credit fraudsters try to pretend that the creditworthiness is not checked at all and that you would get a loan in good faith. For many in their precarious financial situation, this is often the last straw. But you have to keep in mind that no reputable investor lends money so easily without securing himself! Also read the objective provider experience.

Borrowers as credit fraudsters

Borrowers as credit fraudsters

Despite all security measures, banks and financial institutions can still be cheated. In some cases, the amount of damage can well amount to several hundred thousand USD, in individual cases the damage amounts even go into the millions. Counterfeit papers, online accounts and money transfers can lead banks to believe that they have a sufficiently liquid customer in front of them and, due to the visible movements of money, approve a loan without much fuss or fail to adequately check counterfeit papers.

In many cases, Internet direct banks fall victim to such credit fraudsters, because due to the usually high customer numbers and the staff saved, all credit checks are often carried out exclusively by computer programs, which in some cases can be fooled, especially if you know how they work. These programs are constantly being changed, but in most cases the credit fraudster is always one step ahead of the banks here, and the changes only take place after another fraud case has been discovered.

Far less spectacular, but often very expensive for banks and credit institutions, are those cases in which important information is kept secret or incorrectly disclosed because it could possibly lead to a loan refusal. Deliberately providing incorrect or insufficient information can also be considered credit fraud. It is likely to be relatively common, but in many cases fraud is often not recognized as such – or provable. However, this does not mean that such behavior is not punishable as a credit fraud.