This "installment loan provider" has stated that they need to make a deposit of anywhere from 200 to 400 which I am required to send back

Question

They want me to send it back using a prepaid card, Cash App, or something of that nature. They are telling me the reason is my "low" credit rating and that it's for PPI Insurance, and once that is done, they will deposit my requested loan amount.

Obviously, red flags go up everywhere, but I want to be sure that it's a scam. What damage can happen to me if I do it?

Answer 1

Scam! Do not proceed.

It's an advance fee scam or perhaps this. Either way, this it's not legitimate.

However much money you send would be gone. If you give them personal information (e.g., SSN), they could sell it or use it for identity theft. A legitimate loan company won't take "fees" via gift cards or Cash App.

Or, if they give you money and you return it, they might reverse the transaction where they gave you money after you've paid them (via some hard-to-reverse method), meaning you're out however much you send as they undo giving you money. One example would be if they transfer you funds from a stolen account.

Answer 2

Note that, when connection to an account does have to be tested, the test will generally be $1 or less, and in many cases will actually be two or four transfers, making deposits and then canceling them, and asking you to tell them what the amounts were to confirm that they have the right account information.

If it's a larger amount, and they want you to send it back, assume a scam or money laundering.

Answer 3

This is a classic scam. This will work one of two ways:

• They'll deposit money in a reversible form and manipulate you into sending them the money in an irreversible form. Their deposit will be reversed, but you won't be able to get the money you sent them back. For example, if they paid you by check, the check will eventually bounce (but you'll already have paid them the money in a way that can't be reversed). This is, in my opinion, the most likely outcome here based on the fact that they're asking for payment as a gift card.
• The money they send you will have been stolen or otherwise illegally acquired, and they're getting you to launder it for them. This is known as a money-mule scam.