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Ways of avoiding payday loan scams

Whenever and wherever there is desperation, especially of the financial genre, there seems to always be someone to take advantage of the vulnerable. Payday loans no credit check, also known as payday advance, are no exception. But you can avoid payday loan scams.

Now, you should realize that a payday advance is a high interest loan intended for short term use. This by itself does not make it a scam as long as there is reasonable pre-disclosure. That is, you should know exactly how much you are required to pay back and by when plus any penalties involved.

One scam to look out for is a call stating that you owe money on a payday loan. They like to use big-sounding names like “Federal Bank” and “Bar Associate” among others.

You are required to send “payment” by Western Union or Moneygram and if not the caller threatens you with “further action” including getting you arrested. They could also ask for your credit card or bank account number.

You may or may not have obtained a payday loan from anywhere. That’s not really the point. Just don’t panic. The scammer is playing on your fear.
You see, even a legitimate debt collection agency cannot by law threaten you in anyway. They should not even threaten to take you to court if they have no true intention of doing so. A collector should always tell you which company they represent and the nature of the call.

If you do owe money to a payday loan company and are in doubt, hung up the phone and then call the company by dialing their number. Do not call back the number on your caller ID (it is almost certainly a fake one anyway).

You should also ignore unsolicited payday loan offers. If you did not ask for a loan for people with no credit, do not accept one no matter how attractive the terms are. And do not give out any personal information such as name, bank account and/or and social security number.

If you know you have applied for a loan and you’re in doubt as to the legitimacy of the caller, ask for details. Ask the caller to tell you where you applied for the loan, when and other details you submitted such as name of your employer. They should have that information; hang up.

Never pay upfront for a payday loan. A legitimate lender will simply not ask for upfront fees of any kind. If they say that you are required to send them a certain amount befor you can get the loan, run as fast as you can.

Finally, do your homework. There is no substitute for this. Take time to find out if the company truly exists and is reputable. You can check with the Better Business Bureau for complaints. A few complaints will always be there even for reputable companies as some people love to gripe. What matters is the number and frequency of the complaints.… >>