Types of Payday Loan Scams

Updated on September 19, 2017 in General
0 on October 21, 2015

If caught up in a financial crisis, offers like payday loans may seem like just the opportunity you need to hold you over that emergency or unexpected event. However, payday loan scam artists take advantage of these desperate and frustrating times to swindle you off cash. Certainly there those signs you will need to determine whether a lender is genuine or not but at times you may not be able to tell the difference. There are a few common types of Payday loan scams you should be aware of.

The most common type is Advance Fee Loans scams. In this case the payday loan scam artists try to get people to pay an advance fee at the loan approval stage. It goes without saying that once you see an advertisement that will assure you of a loan approval whether in bad or good credit record; you become convinced to submit the requested loan information and supporting documents. Often the lender will call to inform you that the loan has been approved but there are insurance or processing fees to be paid. A legitimate lender will make known this information on the loan application documents and would never request to pay any undisclosed amounts prior to receiving the loan.

It would be also difficult to identify if a payday loan scam impersonates a lender to trick you into giving up your personal information also known as Phishing. This is the other common type of payday loan scam. Scam artists whose aim is not to give you a loan in the first place could impersonate the websites of even those well-known financial institutions just to get a hold of your personal information. In other cases loan phishing scams take time to build a website that looks authentic offering you a loan. Regardless of the method used, the aim remains the same: to get your personal information.

By having access to your personal information, pay day loan scams can use your identity to open accounts in your name or your credit card numbers to use your card at their discretion or banking information to wire away your funds. In all this scenarios, one thing is apparent, that you should not fall prey of payday loan scams as their main aim is to get hands over your valuable cash. Even during that desperate moment and no matter how essential getting that loan would be, it is important to remain skeptical about any lender as even the payday loan scams will work hard to make their business appear legit.

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