Home Loans: Four safety tips when applying online

Finance

If you are looking for a home loan on the Internet you will find many web sites trying to win your business.

How do you know that you are giving your personal, and confidential, details to a reputable company? With so much identity fraud these days, it is important to take precautions about who you give vital information to, particularly on the Internet

We'll give you four things to look out for when you apply for a home loan on the Internet, in this article

Consumer credit licence

A consumer credit licence (CCL) is issued by the Office of Fair Trading to companies who offer credit or lend money to consumers in the UK.

It is a legal requirement that any company that offers credit or acquires your details to pass onto a broker or lender, has a valid Consumer Credit licence.

When applying for a CCL, the company has to prove to the Office of Fair Trading that the company directors are in good standing – do not have criminal records and are who they say they are. The company details are also checked by the OFT to check that the business actually exists.

So if a company holds a valid CCL, you know that their credentials have been examined, and accepted by the Office of Fair Trading. You can therefore be more confident if a consumer credit licence number is displayed on a broker web site.

So that you know what you are looking for, this is our CCL: 575528.

Data Protection Act registered

As applying for a home loan entails providing some very personal financial details about yourself and your partner, it is vital that you can trust a broker with your personal information.

The Data Protection Act (1998) requires any company or individual that holds personal details about customers or staff, to be registered under this act.

Issued by the Information Commissioner's Office, a data protection licence is a legal requirement and ensures that the company handles, transmits and stores your data in a secure and responsible way.

You should always check that any broker web site is displaying a valid data protection licence. Again so that you can recognise one, our data protection act licence is Z9160976.

Advertising standards

Brokers, lenders and introducers have to comply with advertising legislation to prevent false claims about financial products such as home loans, to be made.

There are many rules that advertisers must adhere too, which can be complex to understand, but basically they include:

  • The company must not advertise any interest rates unless a typical APR for that company is also prominently displayed.
  • The typical APR must be written in big text and made obvious to the customer
  • No claims of guaranteed success in loan applications can be made, as this gives a false impression that no one is ever rejected for a loan
  • The advert must not be misleading in any way so that the applicant knows exactly why they are applying to a particular broker, and are aware of any risks in taking out a loan.
  • These standards apply to all forms of advertising including online web sites, text adverts in search engines, newspaper and TV advertising.

The FSA have issued clear information about financial services advertising, which is a useful resource for more information.

Does the loan web site display a proper UK address?

Unfortunately many loan web sites are run by individuals and companies that are not based in the UK. They are attracted to the high earnings that are possible in this market and sell loan leads to other brokers and lenders.

As we have shown in this article so far, it is very important to know who you are giving your personal financial details to, particularly with so much identity theft and fraud occurring on the Internet.

Giving details such as your current and previous addresses, mother's maiden name and date of birth provides an identity fraudster with everything they need to know to commit fraud and steal your identity.

Before providing this information on any loan web site, spend a few minutes checking the About Us or Contact Us pages. Is a bona fide physical UK based address and phone number displayed? If not then question why they are not willing to provide this information.

Your identity is vital – protect it at all times

We hope that this article has explained some of the things to look out for when you apply for a home loan on the Internet.

Any company that takes the time and trouble to acquire the required licences, display all their contact details and adhere to advertising standards, is likely to be more trustworthy than a web site that is unwilling, or unable to meet these requirements.

Maintaining your identity securely, and preventing fraud, is vital. It is very much in your own best interest to spend a few minutes checking out any web site that asks you to enter personal financial, or contact, details.

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