Royal Credit Union has noticed an increased number of scams that start with online loan companies. There are legitimate online loan companies that can help you get a loan through a website or by making a phone call. However, we’ve also seen several scams operating under the disguise of an online loan company. Scammers seek to take advantage of people who need funds by stealing their identity, their bank account information, or even their online banking login credentials.
Applying for a loan can be a stressful process. You likely need the money quickly and want the process to go smoothly. Unfortunately, scammers know this and try to take advantage of desperate borrowers. One common scam tactic is for a “lender” to ask for your bank username and password.
Frequency of Entities
- Scam: 6
- Lender: 7
- Loan: 11
- Bank: 10
- Password: 6
- Username: 3
- Legitimate: 4
- Borrower: 3
Why Do Scammers Ask for Login Info?
Asking for bank login credentials is always a red flag Legitimate lenders will never ask for your username and password, So why do scammers make this request?
There are a few potential reasons
- To directly steal money from your account
- To sell your credentials on the dark web
- To gather information for identity theft
- To install malware on your device
Handing over login information gives scammers full access to your accounts. This allows them to monitor your activity, steal personal data, and drain your funds.
How the Scam Works
The scam typically starts when you apply for an online loan You may find the “lender” through an online ad or search.
The company claims to approve your loan application. But before releasing funds, they request your username and password to “verify your assets.”
Scammers say they need to check your account balances, income sources, or payment history. This is all just a ruse to get your credentials.
Some even try to reassure you by saying they won’t withdraw money. But make no mistake – their intentions are malicious.
Subtle Signs It’s a Scam
Beyond the request for login info, here are some other signs a “lender” is not legitimate:
- Claims you are “guaranteed” or “pre-approved”
- Uses emotional appeals about needing money urgently
- Requests upfront fees before approving the loan
- Only communicates via email or text
- Website looks amateur or has spelling errors
Scammers try to create a false sense of urgency so you hand over information without thinking. But real lenders won’t pressure you or make unrealistic promises.
Safely Verifying Assets
Legitimate lenders need to verify your income and assets. But they do this through documentation, not full access to your accounts.
Here are common verification methods:
- Bank statements – Provide recent monthly statements. Online or pdf files are acceptable.
- Tax returns – Submit complete returns from the last 2 years. Scans or pdfs are fine.
- Pay stubs – Supply pay stubs to confirm employment and income.
- Verification of deposit – The lender contacts your bank to confirm your account balances.
Reputable lenders may also call your employer or require you to sign an IRS form to release tax details.
When Logins Are Required
There are very rare cases where providing login information is legitimate. This usually occurs when linking financial accounts to an app like Mint or Quickbooks.
But even then, you need to take precautions:
- Carefully review the company and app legitimacy.
- Make sure your URL bar shows you are on the correct website.
- Use unique, randomized passwords – don’t reuse credentials.
- Change your password immediately after providing it.
scrutiny of any company asking for login information. Don’t let desperation cloud your judgment.
How to Stay Safe
Avoiding loan scams comes down to vigilance and good judgment. Consider these tips:
-
Stick to well-known lenders – For online loans, go with reputable companies like Lightstream or SoFi. If possible, try local banks and credit unions first.
-
Watch for pressure tactics – Don’t give in to demands for quick action or fears of missing out. Legitimate lenders allow time for evaluation.
-
Never send login information – This is always a scam, without exception. Share bank statements instead.
-
Use strong passwords – Password managers help you use long, unique passphrases for every account.
-
Check your credit reports – Get copies from Equifax, Experian, and TransUnion to see any suspicious applications.
-
Monitor your accounts – Review all statements frequently and report any unfamiliar activity.
-
Trust your instincts – If an offer seems questionable, move on. There are many legitimate lending options.
By staying alert and protecting your information, you can avoid handing money over to scammers. Don’t let them intimidate or pressure you into giving up your credentials.
The Bottom Line
It’s simple – no legitimate lender will ever ask for your banking username and password. This request is a definite red flag for a scam. Stick with trusted lenders, protect your information, and rely on account statements to verify assets. Taking these precautions will help you steer clear of loan and banking scams.
Asking For Money Back Is A Red Flag
If an online loan company deposits money into your account, but asks for some or all of the money back, this is almost surely a sign of a scam. Criminals use a variety of excuses to explain why they need the funds returned, like claiming an error was made or that they need to verify your account to authorize a larger deposit. Don’t be fooled. Legitimate online loan companies wouldn’t put money in your account just to ask that you give it back. And if the company is asking for the money back multiple times or bugging you at all hours of the day to return their funds, you have all the more reason to be suspicious.
A related red flag is if the person or company asks for the money to be returned in the form of gift cards, smartphone payment apps, or cryptocurrency. Gift cards and mobile payment apps are often untraceable, and transactions usually can’t be reversed – which the thieves use to their advantage when the victim realizes what’s happened. You probably wouldn’t hit the ATM, withdraw a couple hundred dollars in cash from your account, and hand it back to a stranger, but that’s essentially what scammers are asking you to do in these situations. If you’ve gotten to this point and the scammer is asking you to return the money, we recommend contacting us to help you take action to secure your accounts.
We hope this information helps you avoid becoming a loan scam victim. Remember that Royal Credit Union is always here to help answer your questions or investigate suspicious activity on your accounts. We can also help you take appropriate action if you’ve been taken advantage of or if your accounts have been compromised.
Businesses should watch out for scams connected to the SBA PPP loan program
Learn the signs of text message phishing attempts
Keep your small business safe from financial fraud with these helpful tips
Get expert advice and information you can trust about a variety of financial topics
Money and donuts – theres no more perfect pairing for a podcast
Watch Royal Credit Union videos about our Members, how-tos, financial education, and more
Never Give Out Financial Institution Usernames Or Passwords
One piece of information that you should never give anyone is your online banking username or password. You are the only one who should have access to your online banking or mobile app. No loan company should ever need to log in to online banking for you. When you give someone else your login credentials, you are giving them complete control over your money, almost like handing them cash. Criminals can transfer your funds to their account, change your login information so you can’t access your account, or apply for new accounts or loans using your information. Never share your username or password with anyone, even joint account holders. Each person on the account should have their own username and password, and no one else should ever have this information.
Do loan companies verify bank statements?
FAQ
Do loans ask for bank username and password?
Do loan companies need access to your bank account?
Why would someone ask for my bank login?
Why do lenders ask for my bank account number?
In some cases, a lender might ask for your bank account number to know where to send the loan funds after your application has been approved. Some online lenders may ask you to connect a business bank account to analyze and verify your revenues to see whether you qualify for an online loan.
What should you do if a loan company asks for login details?
If the loan company is asking you for online banking login details or passwords in return, sever the interaction immediately. Identity theft has become particularly prevalent in recent years. Being aware of the required website security protocols and safety measures may save you from being scammed.
What if a loan company asks for online banking details?
You can contact the FBI and the Federal Trade Commission to file a complaint. Lastly, let your local law enforcement know what happened. Even if the lender isn’t based locally, a police report can help limit their ability to scam others in the future. Will a loan company ask for online banking details?
Do you need a business bank account to get an online loan?
Some online lenders may ask you to connect a business bank account to analyze and verify your revenues to see whether you qualify for an online loan. In those cases, make sure you are dealing with a legitimate lender and a secure website.