We work with hundreds of clients every day who are trying to escape the payday loan trap. Each of their stories is very different. However, there’s one common story that we see with nearly every client we work with. They’ve either been a victim of a payday loan scam or have been contacted by someone attempting to scam them.
Payday loan scams are becoming more and more common. We see it every day. So, here are our top tips for making yourself aware and protecting yourself from online payday loan scams.
1. Stay away from online payday loans!
The best way to protect yourself is to stay away from online payday loans, altogether.
2. Does the company have a license to operate in the state?
Payday loans are banned in many states. For example, these loans are illegal in New York and New Jersey. You can check if payday loan companies are allowed to operate in your state by visiting Real PDL Help’s Payday Loans Across The US page.
Somebody could contact you on the phone or by email and say they are from a legitimate payday loan company or a legitimate payday loan consolidation company. The first step you should take is to check whether they are allowed to operate in your state.
Even if payday lenders are legal in a state, how will you know whether a particular company is licensed or not? One way to find out is to contact your state’s bank regulator or attorney general.
3. Do not trust a phone call or email!
If you receive a phone call or email from anyone claiming that you own them money for payday loan debt, be cautious! Don’t believe everything you’re told. This could be a scam. Scam artists are good at what they do. It’s likely that they have a lot of your personal information (full name, date of birth, social security number, address, employer, etc.). Just because they can verify this information does not mean they are legit.
4. How much will you have to pay in fees?
One way to spot an online payday loan scam is to ask about the amount you would be required to pay in fees. Payday loan companies can legally charge 400% per year or more in some states. Ask the company about their charges and check if it is within the limit specified by your state’s laws.
Does the payday loan company require an upfront payment from you? If it does, it should raise a red flag. Genuine payday lenders don’t ask for advance payments.
5. Do they have a street address?
This is a good way to check if you are dealing with an illegal payday loan company. Genuine payday lenders will usually have a street address. So, there’s a physical location where they can be contacted if it’s necessary. However, a fraudulent company will usually provide only an email address or a phone number. If there is no other way to contact the company, you should be careful.
You should take this precaution when trying to identify legitimate payday loan consolidation companies, as well. Insist on a street address and their contact details.
6. Ask for written confirmation!
Do not discuss (or believe!) anything until you receive written confirmation of your debt. An email does not count! Ask for written confirmation via mail. Contact a lawyer to vet the confirmation. Do everything you can to ensure this debt is real and legit before providing any information or money. The FBI advises to “be suspicious of any email with urgent requests for personal financial information. The email may include upsetting or exciting but false statements to get you to react immediately.”
7. Do not give nor confirm any personal or confidential information!
It is very likely that the person contacting you in an attempt to scam you out of money will have your personal information. They may have obtained it from an online form you submitted. Until you have confirmed that this debt is real and it is yours, do not give nor confirm any personal or confidential information. The FBI cautions you to “never give your Social Security number—or personal information of any kind—over the telephone or online unless you initiate the contact”.
8. Report fraud!
If you are contacted by someone who you believe has falsely obtained your information or is posing as someone they are not and attempting to collect money they’re falsely due, file a complaint with the FTC right away.
9. If you believe you’ve been a victim of fraud, take action!
If you believe you’ve been scammed, take action! Contact the FTC immediately. Because the scammers may also have access to your personal information (social security number, bank account, etc.), you could be a victim of identity theft, as well. So, take appropriate precautions. File notices with all 3 credit bureaus, contact your bank and make them aware, and keep a cautious eye on all of your personal accounts moving forward.
Do not take these calls or emails lightly. Be aware of what a scam phone call or email could look like. Be very cautious. And do everything you can to protect yourself and your finances.
While we cannot help resolve any fraudulent activity, we can help you escape the payday loan debt trap. If you’re ready to make a change, we’re your go-to payday loan consolidation company. Contact us today!