Need cash fast? You aren’t alone. Many people find themselves in a bind with payday looming far ahead. Payday loan services offer the cash you need right away. However, it is important not to let the allure of fast money get in the way of your common sense.
Many predatory people and phony companies out there operate to separate unsuspecting victims from their money. Payday loan scams are common throughout the country, and it is important with the advent of online applications to be careful of scams if you are considering a payday loan. Not only could you lose money, but you could put yourself at risk for identity theft.
Why would a person need a payday loan?
Payday loans function as short-term loans that you can obtain quickly, without the hassle of paperwork and credit checks. Banks are often not an option if you need an amount under $500, especially for people with poor credit. The problem with payday loans is the fees, which are usually very high. States that allow payday lending generally have regulations and laws in place to help protect consumers; however, getting stuck in a cycle of debt is easy to do.
Steps to avoiding payday loan scams
1. Check for a license. States that allow payday loans offer a license that businesses can apply for which certify them as a direct payday lender. It’s important to check for this license when you’re looking into a payday loan service because a licensed business must comply with state laws in order to keep from having it revoked.
This means if you have a problem, you have far more protection on your side. Shady loan services will often either be unlicensed or operate from outside the U.S. so they don’t have to abide by any rules and regulations. These are the services to avoid because borrowing money from them means you are essentially unprotected.
2. Watch for hidden fees. Read the terms presented to you carefully before signing anything. Hidden fees are one way predatory lending companies pull the wool over unsuspecting customers’ eyes. Most states have a maximum for how high the fee-per-$100 borrowed can be. Check what that fee is so you’ll be able to tell if you’re getting charged more than you should.
3. Don’t send any money in advance. Ever read a news story about someone who sent money off to Nigeria because they were told they’d inherited a large sum of money? Payday loan scams are rife with this kind of trickery. Often, a disreputable service will ask you to send money to cover the cost of taxes or application processing. This is bogus, and a sure sign you are not dealing with a legitimate payday loan service. Authentic payday loan services will collect all associated fees when your payment comes due.
4. Make sure you can contact them. It is much easier to deal with a lending service if you can speak with representatives on the phone. Even better, many payday loan services have physical locations where you can talk to someone in person. What you want to watch for are services that only provide an email address for contact. It’s also good to locate a physical address to be sure you are dealing with a company that is based in the U.S. (and thus subject to federal rules and regulations).
5. See how they rate on the BBB. While it isn’t a perfect method of ensuring reliability, the Better Business Bureau is a good resource for consumers. Through the BBB, you can find information on the company, including whether it has had any past violations, how many customer complaints have been received, how the company has handled these complaints and a rating of its overall performance. Can’t find the service in the BBB database? It might be that no complaints have ever been filed, or it might be that the company is not registered in the U.S.
Aren’t all payday loan services scams?
No, not all of them. Companies like LendUp take a different approach compared to many of their peers. Repeat borrowers earn points they can use to borrow more money for longer periods of time and receive lower APRs. Points are earned through making timely payments and taking online financial education courses.
Internet scams to Watch for
There comes an email from a lottery that is from another country and that the victim has never played. In the message he is informed that his email has been chosen among thousands and you have to send a certain amount of money for the shipping costs of the prize. In some situations, mails are backed by “executive” of companies like Microsoft, but it is a total lie.
Spoofing and Phishing:
the most widespread method is considered in the network that involves asking users to share personal information like name, age, country, email address or password. For it can tell you that wants to be hacked your account needs to be updated, or is closed.
You are asked to enter a link but you do not do it, because when entering the site will be asked to confidential information. And the information could illicit activities pretending to be you. It ensures that in such cases 5% of people share without consulting your personal data.
Fraud on SMS and calls:
The deceived people under this system can receive text messages or calls from people who are apparently known. Even they invite their victims for coffee or meet somewhere. If something happens to you, be careful because you can get hurt by these people.
Data theft by False web Pages:
This type of fraud is most prevalent in the case of bank accounts. Many people when they want to consult your statement generally do not write the link to the website of the bank in the Internet bar, but make use of a search engine.
This action is not recommended, as from search engines probably can enter a cloned page. If you enter your username and password to these sites it is almost certain that your data will be stolen, which allow them to access your account for suspicious transactions. To avoid this, it is best to write yourself in the address bar link the site to which you want to enter unaided finder.
Article Overpayment for Selling Scam:
If they make in selling expensive items like cars. You may be selling a car online and suddenly find someone who wants to buy it at a higher price than you asked. The scammer will send a payment order, supposedly authorized by a bank, which is false because the company did not authorize anything. The person loses the car and win a huge debt to the bank.