October 11, 2019
Don't be a victim of payday loan scams! A "representative" of a collection agency who claims to be acting on behalf of a loan company tells victims they must pay their outstanding balance on a payday loan. Unfortunately, the caller is a scammer trying to rip them off or steal their identity. If you've applied for a payday loan, be on the lookout for these six red flags: Read more.
6 Ways to Spot a Payday Loan Scam
Did you know that the FTC paid a total of $505 million to more than one million victims of payday loan scams in 2018? Don't be the next victim! In these scams, a "representative" of a collection agency who claims to be acting on behalf of a loan company tells victims they must pay their outstanding balance on a payday loan. Unfortunately, the caller is a scammer trying to rip them off or steal their identity.
If you've applied for a payday loan, be on the lookout for these six red flags:
1. You've never received a payday loan
While these scams usually target people who have filled out an application for a payday loan, they sometimes go after victims who haven't done so, or who have but not have yet been granted the loan. Obviously, you can't be late paying back a loan you've never received.
2. The caller demands that you pay under threat of arrest
A legitimate loan company will never threaten you with immediate arrest.
3. Caller refuses to divulge the name of the collection agency
If callers actually represent a collection agency, they should have no problem identifying this company by name.
4. You can't find any information about the agency the caller allegedly represents
If callers named the agency they allegedly represent, but you're still suspicious, do a Google search on the company. If you can't find proof of the company's existence or the search turns up evidence of previous scams, hang up!
5. You haven't received a validation notice in the mail
By law, anyone representing a collection agency and attempting to collect an outstanding debt must send a validation letter to the debtor. This letter informs borrowers that they can dispute the debt within 30 days, and specifies the amount of money owed as well as the party to whom it must be paid. If you have not received any such letter in the mail, you're probably looking at a scam.
6. The caller only accepts immediate payment over the phone
When a "collector" insists you pay in full over the phone and refuses to furnish an address to which you can mail your payments, you're likely talking to a scammer.