Spotting loan scams

If someone asks you to pay something before you get a loan, treat the offer as a scam. Swiss Crime Prevention says that a firm asking for an advance on a loan approval is most likely committing advance-fee fraud. Other signs are a request for your bank login, or to open an account «for the payout», a promise of a loan without a credit check, and pressure to decide fast.

The warning signs

1. You have to pay before the payout. A fee, a tax, a lawyer’s cost, an administrative charge: the name changes, the pattern doesn’t. The Federal Office for Cybersecurity (BACS) describes advance-fee fraud (Vorschussbetrug) as demands for supposed fees, taxes, lawyers’ costs or administrative costs, paid up front to release money that never comes. For a genuine consumer credit, the costs are part of the credit: the effective annual rate expresses its whole cost, interest and other costs together, as a yearly percentage (KKG Art. 5 and 6). And if a broker arranges a consumer credit for you, you owe the broker nothing for it (KKG Art. 35).

2. They want access to your bank account. Your online banking login, a security code, remote access software for your computer, or a new account you must open and share. The Zurich cantonal police describe fake lenders who ask for exactly this. Swiss Crime Prevention (SKP) names it as a warning sign too: a firm that wants access to your account, or the power to act on it in your name.

3. A loan without a credit check, or terms that look too good. Every lender that grants consumer credit as a business must check your creditworthiness before you sign (KKG Art. 27a). The SKP warns about firms that offer loans despite open Betreibungen (debt collection), without any credit check, and sometimes at very low rates at first glance. Our guide loans «without a credit check»: what’s true explains the law.

4. The contact runs through ads and messaging apps. In the cases the Zurich cantonal police describe, the offers appear on social media with fake reviews and paid ads. The conversation soon moves to a messaging app such as WhatsApp, you are asked for ID photos and documents, and the «approval» comes quickly.

5. You are pushed to decide now. The SKP notes that people who rip others off try to unsettle them, isolate them and rush them. A consumer credit under the Act gives you 14 days to withdraw in writing after you receive your copy of the contract (KKG Art. 16). Our guide on «instant» loans explains what fast really means.

6. You can’t find the company. The SKP advises checking whether the lender is entered in the commercial register, through the central business name index, Zefix. If it is not, it is very probably not a serious firm. An entry alone is not proof, so check that the name, address and contact details you were given match the register.

Two loan scams the authorities describe

The advance-fee loan. You ask for a loan, or an offer finds you. The «lender» builds your trust first. Then comes a payment you must make before anything is paid out. The BACS describes what follows in advance-fee fraud: after the first payment, new obstacles appear, each with a new demand. The promised money moves further away, and the demands do not stop. People keep paying because they have already paid and do not want to lose it. The loan never comes.

The account that turns you into a money mule. The Zurich cantonal police describe four phases:

1. Fake lenders advertise easy loans without a credit check on social media. People in need find them by searching for an emergency loan or an instant loan.
2. The contact moves to a messaging app. You send personal data, ID photos and documents, and your loan is «approved», pending a few formal steps.
3. You are told to open one or more bank accounts for the payout or the repayment, and to share the login details, security codes or remote access with the «lender».
4. The fraudsters use your account to launder money. The loan never arrives, and you can face criminal proceedings for money laundering.

How to check an offer before you answer

• Look the company up. Check its entry in the commercial register on Zefix, as the SKP advises, and compare the details with what you were sent.
• Search the warning lists. FINMA, the Swiss financial market supervisor, publishes a warning list of companies and people that may be providing services without the authorisation they need. The Zurich cantonal police keep a warning list on cybercrimepolice.ch. FINMA says its list is not complete and recommends checking other lists too, so a name that is missing proves nothing.
• Ask for the contract. A consumer credit contract must be in writing, and you get a copy. It must state the net amount, the effective annual rate, the repayments and your right to withdraw (KKG Art. 9). An offer that never gets to a written contract, but already needs money from you, is not a loan.
• Keep your banking to yourself. The police advice is plain: never give your bank account or login details to anyone else.

If you have already paid or shared details

Act quickly. The BACS says that speed can decide whether further damage is prevented.

1. Stop all contact and pay nothing more (BACS).
2. Call your bank at once. It may still be able to stop a payment (BACS). If you shared account or login details, have every account and card concerned blocked (Zurich cantonal police).
3. Report the offer on cybercrimepolice.ch, the reporting platform of the Zurich cantonal police.
4. File a criminal complaint (Strafanzeige) with your local police if you lost money (BACS). The cybercrimepolice.ch platform can’t take complaints. The Zurich police advise calling your local cantonal police station first to arrange a visit. The BACS points to Suisse ePolice, the online police service, to find a police station near you.
5. Watch for misuse of your data. The BACS warns that personal details you gave away can be used for further fraud.

If money worries led you to the offer, the Zurich cantonal police advise contacting an official debt advice service in your region. Schuldenberatung Schweiz lists the non-profit offices by canton and runs a free hotline on 0800 708 708, Monday to Thursday from 10.00 to 13.00 (schulden.ch). Our guide debt help in Switzerland explains the options, and what lenders check shows what a genuine lender looks at.

Swizeo’s promise

The only code is the one we email you. Nobody at Swizeo will ever ask you for it. If anyone asks you for one in Swizeo’s name, it is not us: don’t pay, and report it as described above.

With us, the steps are set out before you apply. You see your rate, the total cost and the contract in short before you sign. After you sign, there is a withdrawal period, and we send the money after it ends.

Next step

See every cost of a Swizeo loan, and what we check, on the personal loan page before you give your name.