How to Avoid Payday Loan Scams

Payday loan is just one of the tools that swindlers use to scam many people. This is why when applying for a payday loan, you must be very careful in your transactions. It pays to check if the payday loan company is legit before filing your application.

Types of payday loan scams

One of the common payday loan scams is the identity theft. Here, scammers collect personal information from the borrower such as the SSS number, account number, or credit card number, and then use them to steal money from your own bank account. Scammers can also assume the identity of the borrower and use them to apply for loans. Another type of scam is when a lender asks the loan applicant for advance payment in the form of cash.

Steps to avoiding payday loan scams

Step 1: Check online for consumer ratings and complaints for fraud.

There are sources online that expose scams and list down common types of fraud. When researching about the company, you may chance upon a blog or a forum post that talks about the borrower’s experience with a particular lender. Gather as many information as you can about the lender. Contact the company or customer service representative for inquiries.

Step 2: Make sure that the company website is secured.

Don’t fill out any application form if you’re not sure if the company website is secured. Secured sites normally have “https” at the beginning of their URLs. You can also look around first for more information about the site’s privacy and security policy.

Step 3: Find out more about the loan application process.

Legit payday loan companies have outlined application steps for you to follow. They shouldn’t ask you for advance fees and any charge. They should also be clear about the repayment scheme and options like loan extensions.

payday loan scam

Photo source: http://www.flickr.com/photos/keatmeat/8090844106/

Step 4: Read the loan agreement carefully.

Don’t ignore the fine print. Make sure that the amount of loan and how it should be paid are stipulated in the contract, so everything will be in black and white.

Step 5: Report cases of possible fraud to authorities.

If you suspect any form of payday loan scam, contact the authorities to stop the crime. They will investigate on the case and help protect you.

More tips and reminders

You have to be wary of the lenders who ask you for cash when processing your loan. There is a law prohibiting loan companies to ask applicants for unnecessary payment, without providing the services first. And even if you have made sure that the loan company is legit, you still have to take a good look at the terms of agreement carefully. Make sure that the conditions stipulated in the contract are agreeable to your situation. Check the fine print for hidden charges and terms.

Related questions:

1. What should I do if I become a victim of payday loan fraud?
2. Is a no-credit-check payday loan safe?
3. What is a direct payday loan?
4. Is there a way for me to still recover the money I lost through fraud?
5. What are the signs of fraudulent payday loan lenders?

Related posts:

Payday Loan Scams -About payday loan scams
Online Payday Loan -On finding a legitimate payday loan online
Payday Loan Repayment -All about how to repay payday loan.

Comments

  1. PATTY HAUPT says:

    how can i get these people in trouble they are trying to have me and my husband arrested for fraud and then last night i called the police like they wanted and i guess they thought we should have went to jail no one committed it to begin with all because i closed out my account those people are mentally nut’s and got serious issues throwing a fit like a 2 year old over an account that has been closed. There customer service is a phony number nothing but a recording i am serious they go threw alot of telephone number i couldn’t tell you about how many fax numbers this company has they need legal charges filed against them there crooked if anyone has any answers to this let me know thank you

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