Did you know that when applying online for a loan, your personal data – like your name, address, date of birth and card details can be exposed to thousands of people out there who do not have your best interests in mind? Being proactive and knowing what to look out for on a website when applying for a loan is one of the best things you can do to keep your information secure. You can save yourself from so much unnecessary trouble.
At Family Money we have noticed there has been an explosion of brokers and affiliates out there with many of them only interested in selling your applications on. The effort they put in to protect your personal data is very little.
In this article we list 5 things you should look out for when applying for a loan. Read it and it will save yourself from the many shoddy brokers, hackers and viruses lurking out there on the web.
1. FCA Authorisation Number – An Absolute MUST!
This is usually the biggest tell-tale! If there is no FCA AUTHORISATION NUMBER on the website, we advise you to go to the exit button at the top of the page and get out right away! A legit short term loan company will display their FCA authorisation number in a prominent place and if you still feel unsure about them, you can search the company name or number on the FCA website.
You should avoid websites that put the authorisation number on a picture. If you can’t click on it or at least copy & paste it, you should surely avoid it. If you are not sure about a scheme you can try use this tool to see if it is a potential scam.
2. Spot & Avoid “Appointed representative”
Here are few things you need to know about the unsecured loans market in the UK. There are basically three type of players in the niche:
- Direct lenders – Lenders are the only entity that can fund your loan. Currently, in the UK, there are less than 12 active payday / short term lenders. The business of a lender is to give the consumer an affordable loan. If the customer can not repay the loan, the lender will lose money. There are even direct UK lenders for bad credit, but they charge very high rates.
- Credit brokers & Comparison website – They are NOT allowed to fund your loan. They are making their money by selling your application to direct lenders. Brokers and Comparison sites are very aggressive on getting your personal detail so they can sell more. Sometimes, applying with brokers reduce your chances to get approved. Read why here.
- “Appointed representative” – They are mostly advertisement experts that understand nothing about credit, finance or loans. They are not even directly authorised. They work under the umbrella of an authorised company and their only mission is to grab your personal data so they can sell it for the highest bidder.
Now that you understand who is in the game, you should always follow these steps if you want to protect your personal information:
- If you can’t tell at a glance – AVOID! Before giving your personal information on any website, see if you can easily understand if the website is a broker, a lender or an appointed representative. If it does not show at a glance, the owner is trying to hide it – they are probably brokers trying to look like a lender or a shoddy appointed representative.
- Avoid “appointed representative” or “brokers” if possible: Never apply with a broker or Appointed representative websites as your first option. The reason is simple: their job is not to get you the money you need. They will circulate your information among many companies which will reduce your chances to get approved by a real lender.
3. Be Suspicious With A “Contact-Us” Form
Are the FULL CONTACT DETAILS of the company written online? Make sure you can see the address, phone number and email contact. A legit company will want their customers to contact them with any queries. Live chat option is a strong signal of a legit website. A shoddy company will not want any direct contact with customers and therefore they will hide their contact details. If you see a “contact us form” instead of a proper contact details (Phone, address and Email) be very suspicious.
Data protection questions
The most critical reason for you to keep your data safe is to make sure that this information does not fall into the wrong hands. Bad actors may try to impersonate you and take out a loan in your name, effectively leading to identity theft and financial troubles. It is both an individual’s responsibility to keep their data safe, as well as the companies that they entrust with this data, especially when it comes to sensitive personal and financial information.
Personal data refers to any piece of information that relates to an identifiable natural person. As different pieces of information may be combined to lead to the identification of an individual, even the most seemingly trivial bit of information can be considered personal data. The protection of your personal data ensures that you may only be identified for legitimate purposes.
You can protect your data with a series of steps, which include the encryption of your data, ensure you receive and install software update, using a firewall and anti-malware service, ensure you are not inadvertently sharing your personal information due to default settings in online services, and using strong passwords that you frequently change.
4. Cold Calls & Initiation Fee – Be Aware!
Have you received a COLD CALL offering you a loan? WARNING! Ask them for their details and where they got your number from, but never give any of your details! Their details may come in handy, should you decide to report them. Cold calling is a breach of the FCA rules, and no honest lender will call you with a loan offer. Do not use a company that charges an initiation fee – there a plenty of lenders out there who charge no fees at all.
HTTPS – Stay Safe, Only Use HTTPS Websites!
Only use a secure lender with HTTPS at the top of the website. If it doesn’t have a secure connection with a padlock next to their URL, then stay far away and don’t put any of your personal data on that website. A good website will also use simple language to describe what they are selling. If you do not understand what they are offering you, then stay away – you wouldn’t want to get bitten by a loan shark.
Before giving your information online, it is important to certify that the website is legit, secured and trustworthy. This is important especially in the UK where there are many actors like brokers and “appointed representatives” who make their profits by circulating your application data. You may start getting calls and emails you had never opted in to get.
Our essential checklist is designed to help you protect your personal data when applying for a loan online. We have put together all the best practices and ideas to help people who are looking for credit shield their personal information. Please keep this list with you and before applying on any website, go over it and ask yourself, “Can I trust this website with my personal data?”
Even when applying for a business loan the above safety checklist must be used. Click here to read everything you need to know about small business loans in the US in 2020.
Remember: If you are in doubt, avoid it.