Home Loans – Why You Should Take Care When Applying Online

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Home loans have become more popular in the UK in recent years and borrowers are using the Internet in increasing numbers to find the best loan deals possible.

As well as presenting an opportunity for people to use the web to find the best finance deals and then apply for a home loan online, there is also an increasing opportunity for borrowers to fall prey to online fraud and identity theft.

There are some simple steps that you can take to reduce the risk of fraud and identity theft when applying for a home loan online, as I will explain now.

Does the web site display valid address and phone numbers?

Trust plays a large part when making purchases online and I am sure, or at least hope, that you only buy from e-commerce stores that display a valid physical address and working telephone numbers.

You should take similar, if not more, care when entering personal financial details about yourself and your partner into an online application form for a home owner loan. I know for a fact that many loan web sites are run by people “making a quick buck” who are not based in the UK and are not accountable to UK laws.

Without being able to verify that you are giving your vital personal details to a legitimate business, you are at risk of handing useful information to potential fraudsters or identity thieves.

So before entering any information into an online loans application form, take a few minutes to visit the about us and contact us pages. Are their contact details displayed clearly? If not then ask yourself why a web site operating in the financial services sector is not willing to tell you who and where they are.

Is the loans web site properly licensed?

All financial services web sites must comply to FSA regulations. This means that any web site that is asking for your personal details as part of a home loans application, must be licensed and compliant with FSA rules.

Two license numbers are required for loans companies and these must be displayed on their web sites.

The Consumer Credit License (CCL) is issued by the Office of Fair Trading and licenses a company to offer credit and loans. Before a company can be accepted for a CCL, the OFT will check to see that the directors have not got criminal records and that they and the company reside in valid addresses.

In other words having a CCL shows that the company and directors has convinced the OFT that they are of suitable character to conduct a loans and credit business. This should increase your confidence in them too.

The Data Protection Act (1998) requires any company to hold a valid DPA license if they hold any personal information about their customers. Obviously a company acquiring, storing and transmitting your personal financial details meets these requirements.

This is why all web sites that have loan application forms should hold a valid data protection license and display their license number clearly on their web pages.

If a loans web site isn’t displaying a valid data protection act license number then you should seriously wonder why.

To round up

Although I have mentioned that there is considerable opportunity to become the victim of fraud and identity theft if you are not careful with your personal financial details online, it is important to point out that many perfectly legitimate and fully licensed loan companies do exist on the Internet.

By following these simple steps when applying for home loans online, you should increase your chances of dealing with good loan companies who have taken the time and trouble to comply with finance laws and regulations, and are therefore more likely to handle your personal information with care and respect.

Chris Ray writes for MoneyHighStreet.com about loans and finance for UK consumers. You can visit his personal blog here

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