Scam of the month: loan phone scams

Hiya’s data show that loan scams were the sixth most commonly reported phone scam in the world last year. (See Top 10 phone scams of 2023.) So, in this month’s Scam of the Month series, we will look at loan scams: what they sound like and how to prevent them.

There are many, many types of loan scams. Hiya users reported receiving scam calls regarding personal loans, business loans, home loans, student loans, car loans, hardship loans, economic recovery loans, and debt consolidation loans.

In 2023, Hiya received 4,000-5,000 reports of loan scams each month, from Hiya users in 39 countries around the world. Scam volumes remained fairly constant throughout the year, with moderate increases in March, July, and August. 

Which country reported the most phone scams? It was India, even though other countries have more Hiya users. Here are the countries, in order, reporting the most loan scams:

• India

• United States

• Philippines

• Malaysia

• UK

In 2023, Hiya users worldwide reported between 4,000 and 5,000 monthly loan scams.

How Hiya identifies loan scam campaigns

How does Hiya know what loan scams are currently running? Hiya uses two essential data points to identify scam campaigns: user  reports and honeypot transcripts. 

With user reports, consumers using Hiya Protect via their carrier, device manufacturer, or the Hiya mobile app can report the types of scam calls they receive and leave written comments about the call they just received. Keywords in these user reports help Hiya measure the volume of specific scam campaigns over time. 

Hiya also identifies current scams using the Hiya honeypot, a collection of more than 100,000 Hiya-owned phone numbers that record the exact wording of incoming scam calls. 

Below are the most common loan-related phone scams observed by Hiya. 

Personal loan scams

To start, not every call a consumer receives about a loan is a scam. If you’re applying for a loan or have filled out an online form expressing interest, receiving a call from a lender or even multiple lenders is perfectly normal. But here’s some good advice from LendingTree, which lists five warning signs of a loan scam:

A reputable personal loan lender generally doesn’t advertise their services by cold-calling consumers and making them a loan offer on the spot. Whenever a lender reaches out to you first, this can be a sign of a scammer trying to gain access to your personal banking information.

Here’s an example of a personal loan scam robocall captured in Hiya’s honeypot:

This message is brought to you by Alliance Financial. Our records indicate you have a pre-approval, which is set to expire from one of our partners of up to a $100,000 personal loan from one of our partners that is set to expire. This could be an excellent way to tackle high interest. To speak with a member of our team, please press 2. 

If the recipient presses 2, they’ll likely be transferred to a live representative who will ask for all kinds of personal information to complete the phony loan application process.

How do we know this robocall is a scam rather than a legitimate loan offer? First, it’s unlikely that any legitimate lender would pre-approve an individual for a specific amount without any information about their current finances. Second, the robocall called a Hiya-owned phone number with no individual attached. There would be no reason for a legitimate loan company to call this number. 

Business loan scams

Businesses get their share of loan scam calls as well. As with individual loans, these scams often start with a robocall, and if the recipient falls for the scam and presses a number, a live agent will come on to continue the ruse. 

Sometimes scammers will claim they’re returning a call, trying to convince the victim that it’s not a cold call and that the business owner initially expressed interest. Here is an example of a business loan robocall from the Hiya honeypot:

Hey, this is Cindy giving you a call back again. So, I received a notification today that, based on your business's public information, your business has been prequalified for a business loan or credit line of anywhere between five and ten thousand dollars. Interest rates for these lines are extremely competitive, so they really don't cost all that much. One of the best things about this offer is how fast we can get the money to you. If you say yes to this funding, we can have the funds ready for you within just 24 hours.

Notice how general this call is. The callers don’t mention the name of the loan company they represent, nor the name of the person or business they’re trying to reach. They also make too-good-to-be-true claims, saying the business is prequalified for a sizable loan with a great interest rate, with money available within 24 hours.  

Student loan scams

Student loan scams are significant, especially in the United States, where student loan forgiveness programs have been announced, and there has been confusion over which programs are on and which are off. In 2022, the Biden administration announced it would forgive billions of dollars in outstanding federal student loans, up to $20,000 per person.

In June 2023, the US Supreme Court struck down that plan, but smaller, more targeted student loan debt forgiveness programs have been rolled out. This month, the Biden Administration announced a student loan forgiveness plan for public sector workers such as teachers, nurses, and firefighters. 

Every time a new student loan forgiveness plan is announced, scammers see an opportunity to convince victims that they are qualified to participate. Then, they can gather valuable personal information and collect a fee for their services. Here’s an example of a recent student loan forgiveness scam call:

Hello, this is the callback you requested regarding assistance with your federal student loan forgiveness options. The Department of Education approved over $8 billion in student loan forgiveness. Press one now to see if you are eligible to get your loans completely forgiven. This recent announcement could potentially eliminate 100% of your federal student debt. Press one now to see if this applies to you or if your loans have already been forgiven. 

Users report loan scam calls

In addition to the honeypot transcripts shown above, user comments are also helpful to Hiya because they often contain information on how the call recipient experienced the scam. Here are a few examples of Hiya users reporting loan scam calls:

“This person (Jim) keeps calling 1-3 times a day from different 855 numbers. He says that I got approved for a loan (I didn't ask for any). I believe it is fraud looking for private personal info.”

“Main Street Loan offer. This spammer uses several numbers, calls several times per day from different numbers. Uses my phone more than I do!”

“ ‘1 Street Financial. You or someone in your household qualifies for a debt relief loan.’  They need my personal info to start the process.”

“They are scamming people saying they are approved for a loan and then fraud your bank account. It happened to me two weeks ago. They scammed by depositing a $300 check.”

How to fight back against loan scams

Scammers are constantly changing their tactics, and the only way to fight back is with a solution that adapts to ever-changing tactics. 

For carriers, there’s Hiya Protect. It’s a complete call protection solution enables mobile network carriers to protect their subscribers by blocking fraud calls and labeling spam calls. Hiya Protect goes beyond simply identifying spam-likely phone numbers; it uses a proprietary multi-layer approach that analyzes the phone number, call characteristics, the call recipient, and even the calling enterprise’s history across all numbers used. 

For enterprises, there’s Hiya Connect. Hiya Connect’s branded caller ID enables businesses to display their company name, logo, and reason for the call on the recipient’s mobile phone so customers can feel safe when they answer. It also prevents imposters from spoofing businesses’ phone numbers and offers a suite of analytics tools to help optimize call delivery. 

For individuals, there’s the Hiya mobile app, which provides a solution for those who use a phone carrier that doesn’t offer spam protection at the network level.