Payday Loans Scams

Payday Loans ScamsIt’s no joke that payday loans scams do exist, but luckily they are the exception and not the rule. You might wonder how there could be a scam, since the risk is on the lender by giving you the money. But there are plenty of stories of people getting the bank accounts cleared out, or having a company take more than the agreed upon fee.

A scam, by definition, would mean that you’re being duped or bilked out of your money. With payday loans scams you have to be abused above and beyond the outstanding fees they charge. This means that even though you are being taken for a ride by the very nature of a payday loan, that doesn’t constitute it being a scam.

Defining Payday Loans Scams

Payday loans scams would be when a lender takes your money on your payday, but attempt to take more than what they’re entitled to. They could also keep making attempt to take money out of your account, even after you’ve paid the loan off. This is why it’s important to go with a trusted lender, because you are giving them your bank account information, and authorizing them to directly debit your account. An unscrupulous lender will abuse this information, and it can be hard to get your money back because they’ll claim to the bank that they have prior authorization.

Your bank will then tell you that you have to work it out with the lender, and if you’ve gone with an online lender you might not have very much recourse. You could try calling their customer service, but that doesn’t mean you’ll get a solution, especially if it’s a shady business. Many of these online lenders are located off shore so they skirt US laws and taxes. This makes it hard to file a complaint against them, because they’ll be covered by non-disclosure protection in whatever country they’re in.

Offline is Recommended
We recommend going with a locally based lender that is well established. This is the way to know that it’s not a scam, and you’ll know that your information will be safe, and that your account will only be used for the amount specified in the loan agreement. You’ll also have documentation in writing in the form of the loan agreement. These companies are audited regularly to make sure that they are conforming to the laws of the state, and that all of their accounting is in order. The same can’t be said for many online lenders.

If You Can’t Go Offline
If for whatever reason you can’t go to a local lender, you should check the track record of any online company you do business with. Find out where their home office is located, and avoid any company that either doesn’t list it, or lists it as being in a country that’s not the USA.

Be sure that their website is encrypted before giving out your banking data. You can do this by checking for an ‘https’ in the address bar. Some lenders will not have that in place, which means your information is not secure. It’s surprising how many sites don’t feature this, as its a relatively easy and inexpensive upgrade for a site to make.

Lender Broker as a Fix
You can also opt to use a payday loan broker. This is a website that collects a database of verified lenders and matches you with one of them. This is a form of pre-screening the lenders, because a quality loan broker won’t add a scam lender to their list, for risk of jeopardizing their own business. It also involves a third party in the matter, so you can complain to someone else if there’s a problem. It usually won’t solve anything, but it might get them to at least remove that lender from their system.

As we said, luckily these payday loans scams are not the norm. Nine times out of ten you’ll have a fine experience if you stick to a well-reviewed lender. However, if you do find yourself being taken advantage of, be sure to pursue your case as best you can. It can be like being kicked while you’re down, getting scammed out of money when you desperately need it, which is why it pays to pause and do a little research before rushing into a loan with a shady lender.

Add Your Own Experience with Payday Loans Scams Below

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