Beware of credit letter scams

Have you checked your email’s spam folder? Chances are high that it is ripe with emails about a Saudi prince wishing to gift you a chunk of their fortune or an investment opportunity from someone you’ve never heard of that misspelled your name. It seems that new scams are popping up every day.

One type of scam that has gained steam in recent years are standby letters of credit (SBLC) fraud. An SBLC works similarly to a loan but you provide the collateral to the lender upfront to minimize the risk to the lender if you don’t pay back the SBLC.

Scammers are posing as banks and lenders to obtain your money. Fortunately, the FBI has been following credit letter scams and has recognized common traits that these schemes share. These are a few signs that someone is trying to scam you:

  • The offer seems too good to be true. A sign that someone may be trying to rip you off is if the proposed offer promises a disproportionately high return for the risk involved.
  • The lender asks for money upfront. You should be wary of requests for money upfront to fund the loan, especially if you’re asked to transfer money overseas.
  • A lender asking you to sign a non-disclosure agreement. In some cases, scammers asked their victims to agree to secrecy over their agreement and even sign nondisclosure agreements at other times.

Avoiding becoming a victim

While the internet has become a place for scammers to steal your personal info or money, it’s also one of your strongest weapons. If you receive a suspicious offer from a lender that you’re unfamiliar with or feels too good to be true, a Google search can help identify a potential scam. Other times, scammers will represent real companies and you can contact them directly to find out if you have, in fact, received a legitimate offer.

If you’ve been a victim or someone attempts to scam you via a credit letter, you can file a complaint with the FBI. Sharing your experience can provide helpful information to prevent someone else from becoming a victim.

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