One rule defeats most loan fraud on contact: a real lender takes its fees out of the loan — never out of your pocket first. Federal and postal employees are pitched constantly because their paychecks are verifiable and dependable, which is exactly why the fake versions of this market keep metastasizing. Nine checks, in the order scammers usually fail them.
The Nine Red Flags
- “Guaranteed approval.” Underwriting exists; nobody legitimate guarantees its outcome. If the words appear anywhere — banner, email, hold music — the pitch is bait (myth 1 of our FAQ, explained).
- Fees before funding. “Insurance,” “processing,” “federal grant application fee” — a real lender recovers costs from the disclosed finance charge. Anyone asking for money before money is running an advance-fee scam.
- Gift cards, prepaid cards, crypto, or wire transfers. No regulated lender touches these. They’re requested because they’re irreversible.
- A government costume. “Federal employee loan programs” with .org sites, eagles, and agency-sounding names. Real federal agencies don’t lend, don’t charge application fees, and live at .gov — grants.gov and benefits.gov are the only “free federal money” that exists.
- No state license. Lenders serving your state operate inside its rules — every state page links the regulator that lists licensees. Not in the database, not a lender.
- Refusal to name the actual lender. Referral services (like this site) say plainly “we are not a lender.” Entities that are neither a named lender nor an honest broker are hiding from step 5.
- Hour-long deadlines. State rate caps don’t expire at 5 p.m. manufactured urgency exists to stop you from verifying.
- Terms that appear only after you’ve sent ID and bank logins. TILA requires APR, finance charge, schedule, and total of payments in writing before commitment. Numbers-after-docs is processing, not underwriting.
- Requests for your banking password. Lenders verify accounts read-only or by micro-deposit. Anyone asking for the password plans to be you.
The Five-Minute Routine
- Legal name of the lender — from their own paperwork.
- State regulator lookup — license confirmed or absent.
- Entity name + “complaints” in the CFPB database.
- Written TILA disclosure in hand before any signature or document upload.
- Any step fails → close the tab. There is always another lender.
If Money Already Moved
Payment provider first (speed sometimes allows a stop), then FTC, CFPB, and your state attorney general — the regulator links are one click from every state page. And if the pitch wore a federal uniform, say so in the complaint: impersonating a government agency escalates these cases.