Payday loan scams may seem like old news, but they’re more common than ever.
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, any of which should alert you to the fact that you’re being scammed:
1. You’ve never received a payday loan
While these scams usually target people, who have filled out an application for a payday loan, fraudsters often go after victims who haven’t completed one or who have done so but have not yet been granted the loan. Obviously, you can’t be late paying back a loan you never received.
If you haven’t completed your application or you haven’t yet received an answer from the loan company you applied to, you’re talking to a scammer.
2. The caller demands you pay under threat of arrest
Scammers often dishonestly align themselves with law enforcement agencies to coerce victims into cooperating. A legitimate loan company will never threaten you with immediate arrest.
3. The caller refuses to divulge the name of his collection agency.
If the caller actually represents a collection agency, they should have no problem identifying this agency by name. If they refuse to do so, you may be looking at a scam.
4. You can’t find any information about the agency the caller allegedly represents.
The caller is sometimes willing to name the agency, but the company is completely bogus. If you’re suspicious about the call, do a quick Google search to see what the internet has to say about this company. If you can’t find any proof of the company’s existence, such as a web page, phone number, or physical address; or the search turns up evidence of previous scams, hang up.
5. You have not 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.
If the caller was reaching out to you on behalf of a legitimate collection’s agency, they’d be happy to work out a payment plan with you, and provide you with an address to which you can mail your payments. When a “collector” insists that 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 who is only interested in getting your financial information and your money.
If you find yourself struggling to survive financially between paychecks, call or stop by DoverPhila Federal Credit Union today. We’ll be happy to help you learn how to keep your finances at optimum health.