Scammers are found in almost all industries, and the lending business is no exception. If you lend money to other businesses, you must be aware that getting quality prospects is the driving force of your enterprise. But in areas where the demand is high, you’re likely to find fraudsters looking for quick money.
This guide walks you through the common business loan lead scams and how to avoid them.
Lead Scams You Need to Know
Fraudsters use every trick in their bag to make a quick profit. Below are the top scams to be aware of:
Overpromising
The trickster will lie to you that the leads they sell guarantee high conversion. They will tell you they are the best providers and that many other businesses have benefited from their leads. You may pay an upfront fee by relying on this fake guarantee testimony. If you fall into their trick, you may soon realize that the leads are not verified, do not need money right away, and are hence dead ends.
Third Party Leads
The provider of the leads may not be the actual owner. They could have bought them from various sources at a low price. Then, combine them and sell to unsuspecting lenders at a premium. You could be mistaken in thinking that you’re buying high-quality leads at first hand. However, they could be aged or have been sold to other lenders. The source might also be unreliable, and hence you’ll be unable to verify vital information.
Use of Fake and Misleading Information
Fraudsters do not really care if they’re selling authentic leads. All they need is money. Some create fake websites that purport to promote loan products for individuals and businesses. Their intention is to collect contact details from business owners and then sell them to unsuspecting businesses. This is known as data harvesting. It’s a scam because if you contact the prospect, they will ask you about the offer they saw online. It’s bad for business and may damage your reputation.
Spotting Scams
Fraudsters have a lot of tricks, and it’s important to identify the red flags. If the price is too low relative to what the market offers, it’s a red flag. Cheap options are usually low-quality, unverified, and shared with many agents. If the provider asks for large sums of money upfront before giving you the list of interested borrowers, there’s a high chance they’re not genuine. Reputable companies will give you a transparent pricing model. They also don’t pressure their clients into making big commitments upfront.
It should worry you if the deal is too promotional. Genuine lead providers allow their clients to explore the offers and decide on what they want. If the lead is not exclusive but shared with many agents, there’s a chance the information is outdated.
Sourcing Leads from a Trusted Provider
Getting business loan leads from a licensed, trusted and verifiable leads-generating agency can protect you from spending money on scams. A trusted lead provider generates a list of top business loan leads seeking financing using a mix of methods, including digital and AI-powered solutions, to identify and filter real-time, exclusive leads. Their process is also seamless with accurate information such as their contact details, phone number, email address and location of business being transferred to your marketing team.
They also take the initiative of alerting the leads that you will be contacting them for further information and loan processing. This kind of process makes sure everything goes as planned, creating trust between the provider, the lead and your lending firm. You cannot find this type of service from fake or unlicensed providers.
Avoiding Being Scammed
Now that you’re aware of the common scams, there are things you can do to avoid them. Ensure the lead is sold only to you and that no one else has access to the contact. The pricing model from the lead provider should be transparent and clearly explained.
Emphasize real-time delivery so that the prospect is not caught by surprise when you call. Ensure your lead supplier issues you with a survey form containing detailed information about the prospect. This form should have their names, phone numbers, email addresses, type of business, location, loan amount, and reason for borrowing.
Conclusion
You can avoid losing money to business loan leads scams by choosing a reliable provider. Ensure the company sells to you the leads obtained in real time, and the vetting process is transparent.
Knowing how to spot scams allows you to invest resources in high-quality leads that are easier to convert. You also get a chance to build a strong relationship with your client and grow a solid portfolio. Ultimately, exclusive leads are time and money savers and have higher conversion rates compared to shared ones.
