Payday Loan Scams You Should Avoid

Payday Loan Scams You Should Avoid

There are a lot of different scams that you should be aware of when looking for a payday loan, because there are quite a few of them. Each year hundreds of people fall victim to these scams, and they lose a significant amount of money as a result. Payday loans can be incredibly helpful if you find yourself in a financial bind, but you must be able to tell the difference between legitimate opportunities and the scammers. This information will help you recognize when someone is just out to take advantage of you to get your money.

Fake Lenders

While a vast majority of payday lenders are completely legitimate and trustworthy, there are some scam artists out there that you’ll need to watch out for. These fake lenders present themselves as being legitimate, but there are some telltale signs that you can remember to save yourself a lot of trouble.

When you search for payday lenders with Google, you will want to avoid clicking any links that say “ad” in small print. Most of the so-called payday loan companies that put these links up on Google and other search engines are fake and should be avoided altogether. You never want to click on any of these ads, because they will only lead to trouble.

You should also avoid any payday lenders with unsecure websites. If a company’s website doesn’t have the “https” before the URL, you should avoid it altogether. An “http” URL means that it is not secure and therefore not safe to use. The last thing you want is for the information you submit to be used to steal your identity or some other malicious purpose.

Google has been trying to reduce the number of these fake lenders by imposing certain regulations and requirements, but they are still out there. You will definitely need to keep this in mind so that you don’t end up getting taken advantage of.

Advanced Fee Scam

One of the more common payday loan scams that you need to be aware of is “lenders” that ask for an upfront fee of some kind. No legitimate payday lender will ever ask you to pay anything until the due date of your loan. There have been quite a few people who have fallen for this scam over the years, so you will need to keep it in mind.

This scam typically begins with filling out an application online. At first it may seem completely legitimate, but eventually you will be asked to pay something to the lender before you can get your loan. After you have filled out and submitted the application, you will receive a phone call from someone who claims to be a representative of the lending company.

The person on the other end of the line will want to verify the information that you have submitted via the application. This is when they will ask you to pay an advanced fee, and they can be quite persuasive in many cases. They will take the money from you and never give you the loan. Western Union knows about this particular scam, and you should too. You will never want to give any lender an upfront fee of any kind.

Phishing Scams

There are quite a few “phishing” scams that exist within the realm of payday loans. This is perhaps the most clever and potentially damaging scam, so you will need to know all about it. Many people have had their whole life savings drained from their bank accounts because they fell for this scam.

The ultimate goal of a phishing scam is to get sensitive and valuable information from you. This information usually consists of your bank account, credit card number, and other details that can be used to get money from you in some way. You should only ever submit your personal information to lenders that you are absolutely sure are legitimate, because otherwise you’re putting yourself at great risk. Make sure that you take a close look at your credit report every so often so you can make sure that you haven’t been taken advantage of by some scammer without your knowledge.

Protecting Yourself Against Payday Loan Scams

It is also very important that you know how to effectively protect yourself against payday loan scams. There are a number of tips that can help you to avoid becoming the victim of an unscrupulous scam artist, and it’s crucial that you know what some of them are.

  • Make sure the company is licensed: You will always want to confirm that the private lender you are interested in borrowing from has a valid license. It’s important that you stay away from all unlicensed lenders, as they are not legitimate.
  • Look out for Hidden Fees: There are unfortunately quite a few private payday lenders that charge hidden fees, and doing so is a definite sign that they aren’t for real. You never want to borrow from a lender that charges you for things that weren’t explicitly laid out in the contract you signed with them.
  • Asking for money in advance: Any supposed lender who asks for any amount of money in advance is only interested in taking your money and running.
  • Low BBB rating: If you come across a payday loan company with a very low Better Business Bureau rating, you will want to avoid them altogether.

Final Thoughts

With all of the different payday loan scams that exist today, it is crucial that you do your homework so you will be able to recognize them instantly. Many people have lost hundreds and even thousands of dollars as a result of these scams, so you will want to learn all you can about them. When you have this information, you won’t have to worry about becoming a victim of a clever scam artist. There are plenty of legitimate lenders out there, but you will still need to know about the ones that want to take advantage of you.

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