Scammers are now targeting payday loans

0

HASTINGS, Neb. (KSNB) – Scammers are evolving their ways of attacking the bank accounts of hard-working Americans and payday loans are the latest avenue. These types of loans target people who need a quick fix or something to get by until their next payday.

The BBB says the scammers pose as payday loan companies or debt collectors and have affected more than 200,000 people, costing them around $4.1 million. Experts say victims generally feel like this is the only option available to them.

“What’s really devastating with these particular scams is that they pull people out of the fringes. These are people who are generally in desperate need of money and with a very short deadline to work, and because of this they are willing to ignore many of the red flags we mention in the scam study” , said Josh Planos, Vice President of Communications and Public Relations for the Better Business Bureau.

The playbook is not much different from other types of scams and payday loans have a wide cross section; but they target a certain crowd of consumers.

“Typically middle-aged. Kids and teens usually don’t look for payday loans, but it kind of depends on the type of scam due to debt collection. We send out news releases all the time about scholarships, student debt,” Planos said.

One way to sniff out one of these scammers is the ridiculously high interest rate. Payday loan interest rates are capped at 36%. The victims of this type of scam agreed to pay double the amount of the loan.

“They come to these places because they desperately need a solution and have exhausted all their other options. So what’s particularly notorious about these types of scams is that they target people who are already on the fringes, who have already lost their chance,” Planos said.

Consumers are advised to look for the signs, before the scammers trick them into putting them in a compromising position.

“The reality is that your life may never be the same again. I hate to say it in such crude terms, but it really is something that threatens your future purchasing power, your credit score absolutely, your ability to pay for everything.

Experts say some victims of the scam are still struggling to pay their bills and put food on the table. They also urge anyone who is going to apply for a payday loan to make sure that this company is accredited.

Share.

Comments are closed.