A "loan" company contacted me saying I was approved for up to $4,000. The man said I needed to allow them to deposit $400 into my account to verify my account. Then, he wanted me Cash App the company $220 and once that's received, I can get the amount I want for the loan.
I smell scamming, am I wrong?
Sometimes a legitimate financial company wants to test that the bank information is correct and that you can see the account. They make two small transactions that equal $1.00. They then ask you the amount of each the transactions. They then pull back the funds by reversing the transaction.
There is no reason to do this with $400 instead of $1.00. There is no reason the have you send the $220 to somebody else. But fully expect that once you transfer the $220 they will reverse the original $400 and will disappear.
Yes it is a scam. It doesn't matter if you contact them first, or if they contacted you first. This has all the red flags of a scam.
It is a SCAM!!. A legitimate loan company would never request that you deposit money into your account or send them money as an account verification procedure for obtaining a loan.
This is a way scammers can use your bank account to move Illegal money gotten from fraudulent activities, also requesting to send money through platforms such as Cash App is a favourite trick since it is difficult to trace and return the transaction.
Legitimate lenders may charge an application fee, but it's usually applied to the loan itself. Not paid for ahead of time.
This tactic is often used by scammers from West Africa, and east Asia.
A legitimate financial institution would have reason to deposit (and then withdrae) two small amounts totaling less than $/€/£ 1 in order to be sure they have the correct account to make deposits to or make withdrawals from. They can also do this to prove you have access to the account by having you identify the two amounts.
Other than this, if they want you to pay them money in order to get a loan, it is a scam. But you could scam them back. Use an account that has no money in it, let them put the $400 in, have someone watching the account move that money elsewhere immediately, then change your mind and don't pay them the $220. Let 'em sue you for the $400, which they can't do!
