What Are Loan Scams, and How Do You Avoid Them?

Getting declined for a loan can be frustrating, especially when you need extra funds. So, when another offer shows up in your inbox promising guaranteed approval, it might feel like the answer to all your problems. But this loan offer requires you to pay a small fee to get started. Guaranteed offers that require an upfront fee to access money can be a warning sign of a loan scam.

Loan scams are alarmingly common and costly. According to the Federal Trade Commission, consumers reported losing more than $12.5 billion to fraud in 2024.¹ Whether you’re looking for quick cash or comparing your loan options, knowing how to spot a loan scam can help protect both your personal information and your money.

What is a loan scam?

A loan scam is a scheme where fraudsters pose as a legitimate company or lender to trick you into giving them money or your personal information — like your bank details or Social Security number — with the false promise of receiving a loan in return.

How do loan scams work?

Fake lenders typically advertise attractive loan terms, such as low interest rates, flexible repayment options or guaranteed approval, to lure victims into applying for loans.

Once the victim provides the requested upfront fees, sensitive personal information or access to their bank accounts, the scammer may disappear with the money or use the information for identity theft.

Loan scams can take various forms, including:

• Online advertisements²
• Fake websites posing as legitimate lending institutions³
• Unsolicited emails or phone calls⁴

Some scammers impersonate OneMain to make fraudulent loan offers. These scams illegally use the OneMain name, logo and, at times, branch contact information as part of the scheme. The scammers can exploit the victim’s phone, text and email accounts by posing as OneMain representatives, using misleading wording or documents.

If someone contacts you claiming to represent OneMain, reach out to the OneMain branch nearest you to check whether the offer is legitimate.

Are you at risk for a loan scam?

Unfortunately, everyone is at risk for loan scams — but some people may be more vulnerable than others. According to a 2024 Better Business Bureau (BBB) Scam Tracker Risk Report, individuals aged 65 and older reported the highest median dollar loss from scams.⁵ Scammers also tend to target people who are facing financial pressure or are unfamiliar with how legitimate lending works.

Why do some people fall for fraudulent schemes? Here are some common emotional tactics scammers use:³

• Fear of missing out: Scammers may promise exclusive offers or early access to tap into a feeling of being left out or missing a rare opportunity.
• Using people you know: If it seems like others are saying yes to the same offer — or if the scam appears connected to someone you know — it can be harder to walk away.
• Creating a sense of urgency: Scammers often entice victims with limited-time offers, encouraging them to make a quick decision before getting all the facts.
• Using emotional triggers: Scammers may manipulate your feelings by threatening a harsh consequence and making you panic. Conversely, they may offer scams that promise big rewards and opportunities.
• Promising a quick solution: Offering the chance to get ahead or solve a money problem quickly can make fake loan offers seem more appealing than they are.

How to avoid loan scams

Avoiding loan scams starts with knowing what to look for and who to trust. Here are some steps you can take to help protect yourself from loan scams.

Check if the loan company is legitimate

Scammers often pose as legitimate, credible lenders.

Whether you apply for a loan with OneMain or a different lender, it’s important to know what to look for to make sure they’re legitimate. Check out these tips:⁷

• See if the lender is registered in your state: The lender you’re applying with should be registered to do business in the state you live in. You can verify this by checking with your state’s attorney general or banking regulator.
• Check the lender’s website: Double-check the URL to make sure there aren’t any misspellings. Ensure it starts with https:// to verify the website is secure. Use a search engine to search for the lender’s website instead of directly typing the address. The official company website usually has the highest traffic and should pull up toward the top of the page in your search.
• Verify the lender’s contact information: Whether you’re applying with an online lender or one with a physical location, the company should always have a physical mailing address. You can also review the lender’s email address. If it ends in an account name that is not consistent with the official name of the organization, you should be skeptical. For example, if the email address ends in anything other than @OMF.com, it is not from OneMain.
• Read reviews: It’s always helpful to read customer reviews online through trusted sites like Trustpilot, the Better Business Bureau or Google Reviews. If the lender is legit, you’ll usually see consistent reviews and responses to complaints.

Recognize red flags

Watch out for these red flags when reviewing loan offers from any potential lender:

• Guaranteeing approval and/or not checking your credit history.
• Asking you to pay fees up front before receiving loan funds.
• Instructing you to make payments by purchasing or placing money on debit or gift cards.
• Instructing you to make your fee payments through money transfer apps, like PayPal, Venmo or Cash App, or through cryptocurrency.
• Continuing to ask for extra fee payments in addition to your scheduled loan payments until you either decline or run out of money; also, asking you to overdraw your checking account to pay the fees.
• Advising that they will put money in your bank account to show good faith, for you to then return the payment to them.
• Emailing you from a personal email account, like gmail.com, instead of a corporate account, such as omf.com.

What should you do if you get scammed?

If you find yourself trapped in a loan scam, it's crucial to act quickly and strategically to get ahead of any potential damage to your finances, credit or identity.

Falling victim to loan scams can be stressful, embarrassing and financially crippling. But whether you've been deceived by promises of quick cash, low-interest rates or no credit checks, take these steps right away to address the situation promptly.

Report your situation immediately

Here are some places where you can report fraud:

• The Federal Trade Commission’s fraud report page or call 877-438-4338
• Your state’s attorney general office
• The FBI Internet Crime Complaint Center
• The Better Business Bureau Scam Tracker

If you’ve been targeted by someone posing as OneMain, contact a OneMain branch near you immediately and speak with a team member.

Protect your information

After you’ve reported the scam to law enforcement, another agency or the BBB, take these steps to secure your accounts and personal information right away.

• The Better Business Bureau Scam Tracker. Some may use fake voices with artificial intelligence to sound like someone you know and trust. Do not give them additional information or send money or gift cards.
• Contact your bank or financial institution. If you’ve given the scammers your personal bank information (account number, PIN, credit card numbers, etc.), contact the issuing bank or credit union right away, tell them what happened and ask what you should do next.
• Contact credit reporting agencies. If you gave sensitive personal information to the scammers (e.g., Social Security number or date of birth), consider contacting all three credit reporting agencies (Equifax, Experian and TransUnion) to place an Extended Fraud Alert with your phone number and/or freeze your credit report.

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Think twice before you click "apply"

Loan scams pose a significant threat to unsuspecting people. By understanding the various tactics scammers use and staying cautious, you can better protect yourself from their schemes.

Sources:

1 https://www.ftc.gov/news-events/news/press-releases/2025/03/new-ftc-data-show-big-jump-reported-losses-fraud-125-billion-2024
2,4 https://finance.yahoo.com/personal-finance/personal-loans/article/personal-loan-scams-155050162.html
3 https://consumer.ftc.gov/what-know-about-advance-fee-loans#warning
5 https://bbbmarketplacetrust.org/wp-content/uploads/2025/02/2024-RiskReport-US.pdf
6 https://www.psychologytoday.com/us/blog/how-to-make-better-choices/202506/why-smart-people-fall-for-fraudulent-schemes
7 https://www.investopedia.com/are-online-loans-legitimate-8713849#toc-how-to-check-if-an-online-lender-is-legitimate

*This article was updated from its original posting in 2022 and 2024. Skye Kavanagh contributed.