Payday loans can be a great option for applicants who need quick cash and who’ve had credit trouble in the past. However, not all lenders are the same. While most payday loan companies are completely legit and follow the state and federal laws, some may be nothing more than scammers who are taking advantage of people in financial need. If you’d like to avoid becoming one of their next victims, then here are five things you need to do to avoid scammers when getting .
Ignore email solicitations
If a payday lender you’ve never heard of ever emails you directly, be very suspicious. Criminals are notorious for using emails like these as phishing schemes designed to steal your personal information.
One obvious sign is that the email address may be from a free online account (think Gmail, AOL, or Yahoo!) or not contain the name of the company anywhere within it. If you’re ever in doubt, don’t click on any of the links and simply delete the email.
Research potential lenders
As you make a shortlist of potential payday loan providers, be sure to check into each one accordingly. Some might seem authentic and offer rates that are significantly below the competition. However, these offers may be too good to be true.
Google each company and read any online reviews that come up, good or bad. Don’t forget to also check with the
Don’t pay any money upfront
Oftentimes, fraudulent companies posing as payday loan lenders will ask applicants to make payments during the application process. Some of the common reasons they give might be to:
- Check your credit score
- Get a lower interest rate
- Guarantee the loan
These reasons are likely false. Legitimate payday lenders will not ask you to pay a fee before you find out whether you qualify for the loan.
Don’t return the loan immediately
If the loan provider ever sends you money and then asks for it to be returned immediately, this can also be a sign of fraud. Essentially, they’re trying to trick you into sending them a payment for funds that were never actually transferred.
Never make repayments using alternative methods
If a loan provider ever suddenly claims there’s a problem with your bank account and that you need to use another means such as Venmo or gift cards, that’s a red flag as well. Legitimate operations will likely never ask to be repaid by anything other than cash, check, or credit card.
What to do if you’re the victim of a scam
Despite our best efforts to be vigilant, sometimes scammers get the best of us. If that ever happens to you when it comes to a payday loan, then you should report the situation to the following:
- Federal Trade Commission (FTC) – ReportFraud.ftc.gov
- Your state Attorney General
Scammers know that people who are in need of a payday loan often need money quickly. However, that doesn’t mean you have to make yourself an easy target. Fight back by making informed decisions and vetting a company before you apply for a loan. If a lender seems questionable or out of the ordinary, don’t hesitate to report it.