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HomeFINANCECredit scams: How to identify legal intermediaries?

Credit scams: How to identify legal intermediaries?

Have you been approached by a credit intermediary who can get you dream conditions for your home loan? Did they guarantee you a credit where you just need to send one or two documents for your financing to be approved? Attention, because Credit scams exist and don’t just happen to others.

Before proceeding with a credit through an intermediary, know that you have a protective shield in your hands against scams and fraud. And this is know how to identify whether a credit intermediary is legal or not.

As a credit intermediary recognized by the Bank of Portugal, the Doctor Finance explains how you can protect yourself from these types of schemes and helps you find the best credit solutions on the market, at no cost to you.

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A credit intermediary is a person or company that carries out the mediation between the customer and the bank or credit institution.

That is, if you take out a home loan through a credit intermediary, in practice, the intermediary will handle the entire process. Nonetheless, will never grant your fundingas this is in charge of a bank or one of the partner credit institutions.

But not just any mediator can take on this role. a credit intermediary need authorization from the Bank of Portugal to operate in the market, as there are services and functions that you can perform and others that you cannot.

For example, a credit intermediary cannot grant credit, or intervene in the marketing of other banking products and services, such as term deposits or payment services. However, you can:

  • Present you with credit proposals/agreements;
  • Guarantee assistance and streamline the entire procedure;
  • After a green light from the client and the partner financial institution, enter into credit agreements on behalf of the financial institution;
  • Provide consultancy services: advising and recommending the client, in a personalized way, on the different types of credit agreements.

In Portugal there are more than four thousand credit intermediation entities divided into three categories:

  • Linked credit intermediaries: They act under the full and unconditional responsibility of one or more lenders with whom they have entered into a binding agreement.
  • As an accessory: They provide goods or services, on behalf of and under the full responsibility of one or more lenders, acting as credit intermediaries, with the aim of selling goods and services they sell.
  • AND unbound: They are intermediaries that work without a binding contract, but enter into an intermediation contract with the consumer, which stipulates the terms and conditions of the credit intermediation service.

To avoid falling into credit scams, the first step is to ensure that before starting the process you are talking to a legal credit intermediary. Thus, it is sufficient to confirm whether the company in question carries out the activity of an intermediary in the Bank Customer Portal.

However, please note that credit intermediaries authorized to operate in Portugal may appear on two lists on the Banco de Portugal website:

  • And on list of credit institutions, finance companies, payment or electronic money institutions who also provide credit intermediation or consultancy services. Please note that these entities can only perform these services in credit agreements in which they do not act as lenders.

If the alleged credit intermediary is not included in any of these lists, do not provide your data, and end the conversation. We warn that all fraud attempts must be reported to Banco de Portugal and the competent authorities, as PSP, GNR, Judicial Police or Public Ministry.

Credit Scams: Know some warning signs

In addition to checking the legality of a credit intermediary, you may notice that something is not right in some situations. In terms of charges and commissionsthe legislation prohibits tied and ancillary credit intermediaries from charging commissions.

Outside are the non-tied credit intermediaries that can charge commissions, but must indicate in the contract the value of the services and commissions involved.

Then pay attention to the information that exists about the entity in question. Make sure the contacts belong to the official entity in a search engine. On the other hand, if you have never heard of this credit intermediary, look for information about the company’s suitability, check testimonials, reviews, complaints and claims.

Finally, carefully read the communication of this entity. Look for spelling and grammatical errorsand be alert when phrases like “quick money”, “no hassle” or “no bureaucracy”. Behind these promises are mostly credit concessions in return for real estate, checks or debt confessions.

If you are thinking of buying a house soon, a legal and experienced credit intermediary can be a precious help at this stage of your life. After all, buying a home with a home loan is not always a simple process for an individual. It all starts with collect loan proposals, review them and get pre-approval of the best financing for you.

And at this early stage, a credit intermediary can not only clear all your doubts, tell you all the necessary documents you need to gather, how will you proceed with analysis of various credit proposals according to the conditions you want.

One of the great benefits is that credit intermediaries have a privileged relationship with banking institutions. and given to trading experience, the more likely it is to obtain better conditions for the credit you need. For example, it is very common for a credit intermediary to obtain lower interest rates than most individual consumers.

Not to mention that the process will move forward with greater celebrity. Thus, you will save time with bureaucracy and money, as you can get more attractive conditions, such as a lower spread.

But the great advantage is to benefit from all this personalized support for free. At least, with Doctor Finance the client does not support any kind of costs from the beginning to the end of the process.

There are many happy endings, but not all endings are rosy.

Although a legal credit intermediary can help you expedite the process of your home loan application, be aware that not all intermediaries will get you the best conditions on the market.

There are intermediaries that specialize in the sale of credits, and therefore have a partner portfolio comprising many or almost all banking and credit institutions. And in these cases, numerous proposals are analyzed until the ones that meet the best conditions for you reach your hands.

The problem is that not all intermediaries work this way, as the sale of credits is not their main focus. This is because the specialty may be associated with the sale of real estate or other goods/services. Soon, you are not dealing with credit experts.

And this may imply that the proposals you receive are not the most advantageous for you, as the partners in question are not able to offer these conditions or the intermediary content with standard proposals and not customized for your case.

At Doutor Finanças, the doctors are specialists in finding the best solutions on the market for you with the our vast network of partners. In addition, it has completely free monitoring of your process from start to finish.

To do so, simply fill in the form below and you will be contacted shortly by one of our doctors.

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