Beware of Scams from the Fake “National Financial Hardship Loan Center”

The economic crisis caused by the pandemic has left many people in dire financial situations This environment of vulnerability has given rise to a disturbing scam targeting cash-strapped individuals and families. Fraudsters are cold calling people while posing as representatives from the fictitious “National Financial Hardship Loan Center” They promise access to loans worth thousands of dollars to pay off debts and cover expenses. However, their true intent is to steal personal information or burden victims with loans carrying outrageous hidden fees and interest rates.

How the Scam Works

The scammers behind this scheme use robocalls and leave voicemails with the following script:

“Hello, please listen to this important message. This is a message from the National Financial Hardship Loan Center. This is a final attempt to reach you regarding a $36,000 financial hardship loan that can be funded today. Due to inflation and rising costs, we offer same-day approval with no credit check. This loan can be used for any purpose including paying off debt, unexpected bills, or personal use. Please call our national office today.”

This message is carefully crafted to sound urgent and make the offer seem irresistible to cash-strapped individuals. Promises of quick approval without a credit check and access to a large amount of funds are meant to pressure victims into calling back right away

Unfortunately, the “National Financial Hardship Loan Center” does not actually exist. The scammers use this fictional entity to lend legitimacy to their scheme. Their true aim is to harvest sensitive personal and financial information for identity theft or saddle victims with predatory loans.

Red Flags to Watch Out For

Here are some red flags that indicate a call from the fake National Financial Hardship Loan Center is a scam:

• They are using robocalls – Legitimate lenders do not use illegal automated dialing technology to cold call potential borrowers.

• Aggressive sales tactics – Creating a false sense of urgency and limited time offers are common tricks scammers use to get victims to act before thinking.

• Requests for personal information – Scammers will ask for your Social Security Number, bank account details etc. under the pretext of processing your “loan application”.

• Promise of guaranteed approval – No legitimate lender will approve a loan without first checking an applicant’s credit score and financial background. Approval cannot be guaranteed.

• Upfront fees – Scammers may ask for an “insurance fee” or “processing fee” upfront before approving your loan. This is a major red flag.

• Outrageous interest rates and hidden fees – Read the fine print carefully before accepting any loan offer. Predatory lenders often hide extortionate interest rates and fees in the loan agreement’s fine print.

How to Protect Yourself from This Scam

Here are some tips to avoid becoming a victim of the fake National Financial Hardship Loan Center scam:

• Never engage – Hang up immediately if you receive a call claiming to be from the National Financial Hardship Loan Center. Do not speak to the caller or press any buttons.

• Report numbers – Inform your phone carrier and the FTC if you receive a robocall from these scammers so they can take action.

• Install call blocking apps – Use call screening and blocking apps to stop these illegal robocalls from reaching you. TNS Call Guardian is a highly rated option.

• Apply directly – If you need a loan, only apply through legitimate lenders like your bank or credit union. Do not trust offers that come to you unexpectedly via phone calls or emails.

• Verify credentials – Research any lender thoroughly online before applying for a loan and sharing personal information.

• Read before signing – Carefully go through the terms of a loan contract before signing. Watch out for hidden fees and inflated APRs.

• Seek assistance safely – Use trusted non-profit sources like credit counseling agencies if you need advice managing debts. Avoid “help” from unknown callers making too-good-to-be-true offers.

The Reality of Financial Hardship Loans

While the National Financial Hardship Loan Center does not really exist, some legitimate programs do offer loans to high-risk borrowers facing urgent expenses or other financial crises. However, it is important to have realistic expectations when exploring these options.

Some key facts to keep in mind are:

• Hardship loans often have high-interest rates – Lenders view distressed borrowers as riskier so charge more. Rates can easily be over 30%.

• Strict eligibility criteria – You will need to prove the urgent need, show regular income to repay, and have filed taxes. Poor credit/bankruptcy may disqualify you.

• Small loan amounts – Do not expect to easily get approved for loans worth tens of thousands of dollars. Loan amounts are often capped around $5000.

• Fees apply – Origination fees around 5% are common. Late fees and returned payment fees can add up too.

• Collateral required – Your home, auto or other assets may be put up as security for the lender. This risks forfeiture if you default.

• Impact on credit – Late or missed payments will negatively impact your credit score and ability to get other loans.

For most people facing temporary cash shortfalls, options like requesting paycheck advances, borrowing from family and friends, using credit cards, or getting community assistance may be better than resorting to predatory hardship loans. Speak to a non-profit credit counseling service if you need guidance finding safe ways to overcome financial struggles.

How to Report the “National Financial Hardship Loan Center” Scam

If you come across this “National Financial Hardship Loan Center” scam, make sure to report it through the following channels so that action can be taken to shut down the fraudsters and prevent more victims:

• Report to the FTC – File a scam report with the Federal Trade Commission via their online form or by calling 1-877-FTC-HELP.

• Inform state authorities – Contact your state attorney general’s office and local consumer protection agency to alert them about this scam operation targeting residents.

• Notify phone carrier – Contact your phone company and ask them to block the phone numbers being used for the robocalls.

• Use robocall reporting apps – Apps like TNS Call Guardian let you report illegal robocalls so other users can block those numbers.

• Warn on online forums – Post about your experience on sites like Reddit, Quora and scam alert message boards to make others aware of the scam.

• Report to lending authorities – The Consumer Financial Protection Bureau and state financial regulation departments want to know aboutloan scams targeting their residents.

The more victims who speak up, the sooner authorities can take action to shut down these scammers pretending to be the “National Financial Hardship Loan Center.” Do not suffer in silence if they harass you with unwanted calls and deceitful loan offers. Report them immediately so they cannot continue exploiting vulnerable individuals and families trapped in financial crisis.