Beware of the National Finance Hardship Loan Center Scam

Facing financial hardship can be incredibly stressful. You may be struggling to pay your bills, put food on the table or avoid eviction. In desperate times a lifeline offering cash assistance can seem like the perfect solution. However, predators are out there looking to take advantage of vulnerable people in need. One scheme to watch out for is the “National Finance Hardship Loan Center”.

This convincing operation claims to offer loans to financially distressed consumers. However, it’s actually a scam that will leave you in an even worse financial position. In this guide, we’ll explain how the National Finance Hardship Loan Center scam works, what techniques they use, and most importantly – how to avoid becoming a victim.

Overview of the Scam

The National Finance Hardship Loan Center first contacts targets through phone calls, often using spoofing technology to make it seem like they are calling from a local number. The caller will say they are with the “National Finance Hardship Loan Center” and ask if you need assistance with bills food, or housing costs.

If you express interest they claim you’ve been “pre-approved” for a personal loan up to $50,000. To move forward you need to pay a small “verification fee” upfront. This is where the scam begins. Even if you pay the fee, you will never get the promised loan funds.

Below we’ll explore exactly how this despicable scam works to better understand their tactics.

Hook: Offering a Financial Lifeline

The scammers know that people struggling financially are primed to jump at any potential lifeline. By leading with offers of cash assistance, they know financially distressed targets will be hooked. Even skeptical consumers may think it’s worth paying a small fee just to see if the loan comes through.

The callers will ask questions to gauge your situation, and custom tailor their pitch. If you’re facing late bills, they’ll promise their loan can get you caught up. If you mention needing grocery money, they’ll say you can use the funds at any store. Their flexibility makes the loan seem credible.

Line: Requesting an Upfront “Verification Fee”

Once they have you on the hook, the scammers start reeling you in. They’ll explain that you need to pay a small upfront “verification fee” to process the loan. This is usually $200-500 to provide your account details.

They claim this fee is fully refundable if you are deemed ineligible for the loan. This makes it seem low-risk, when in reality you will never see that money again. The scammers collect the fee then cease all contact.

Sinker: Vanishing After Getting Paid

This is the final stage where victims realize they’ve been scammed. As soon as the scammers receive the verification fee via wire transfer, gift card, or other means, they disappear.

The promised loan never materializes. Any attempt to contact the company reaches disconnected phone lines. The hard-earned money you sent is gone. And you are left in an even more desperate financial state than before.

Unfortunately, these predatory scammers look for people who are down on their luck to take advantage of. Now that you understand their deceitful tactics, here are some tips to avoid becoming a victim.

How to Avoid the National Finance Hardship Loan Center Scam

While scams constantly evolve, there are ways to protect yourself and your hard-earned money:

• Be wary of unsolicited offers – Legitimate lenders will not call you out of the blue with loan offers. This is a huge red flag something is amiss.

• Research the company – Search online for reviews and complaints about any company offering you a loan. You’ll quickly find warnings about scams.

• Never pay upfront fees – It is illegal for companies to charge you simply to apply or “unlock” a loan. Report any lender requesting this.

• Consult trusted sources – Talk to a non-profit credit counselor or your state consumer protection agency about assistance options.

• Trust your gut – If an offer seems too good to be true, it always is. Don’t let excitement cloud your judgment.

Falling victim to predatory scams when you are already facing financial hardship can be devastating. While the promise of easy money is tempting, you must be extremely cautious. Take the steps above to verify a loan offer is legitimate before sending any money or personal information.

There are reputable public and non-profit resources available to help those in need. While it may take more effort than accepting a suspicious “hardship loan”, you will have peace of mind knowing you avoided a scam aimed at taking advantage of your situation. Stay vigilant and protect yourself.

Government Assistance Options to Avoid Scams

If you are facing financial challenges, there are legitimate assistance programs available without falling prey to scammers. Here are some reputable government resources:

• Food Assistance – SNAP provides food stamp benefits to low-income households. WIC also offers nutritional help for mothers and young children.

• Housing Assistance – The HUD website lists programs available in your state for emergency housing, rent payment help, and subsidized affordable housing opportunities.

• Unemployment Benefits – Those who lost a job may qualify for unemployment payments while seeking new work. The Department of Labor has state unemployment program contact information.

• Temporary Aid for Needy Families (TANF) – This program provides financial assistance to very low-income families with children. Benefits and eligibility vary by state.

• Low Income Home Energy Assistance (LIHEAP) – LIHEAP helps cover home heating and cooling bills through federal grants disbursed by states.

In addition to government programs, reputable non-profits like United Way may be able to refer you to local resources or charitable assistance.

Beware Student Loan & Debt Relief Scams Too

Along with fake hardship loans, consumers must also watch out for student loan and debt relief scams. Some common red flags include:

• Guarantees of loan forgiveness or wiped out debt.

• Requests to pay large upfront fees before services are rendered.

• Pressure to sign up immediately for the best results.

• Calls out of the blue claiming to be from the government.

As always, do your own detailed research before agreeing to anything. Check for complaints with state consumer agencies and the Better Business Bureau. Consult a non-profit credit counseling agency for assistance negotiating debt.

Don’t Become a Financial Fraud Victim

Losing money to scams and frauds further exacerbates an already difficult financial situation. Protect yourself and your family by understanding how these predatory schemes work. Seek help from trustworthy public and non-profit sources. Avoid offers that seem too good to be true.

Stay vigilant against sham operations like the fake National Finance Hardship Loan Center. Know the warning signs of scams. Check out resources such as the FTC’s website for the latest fraud alerts. The more informed you are, the less likely you’ll become a victim. Don’t allow scammers to take advantage of your financial vulnerability.