Payday Loan Scams

In these tough economic times, the service provided by the payday loan industry is becoming more valuable than ever, especially for many people needing a little extra boost to help them get through a particularly rough time. Most payday loan stores are, in fact, legitimate businesses with a vested interest in helping their consumers in exchange for a fee. However, there are businesses of ill repute, which seek to take advantage of the unwary in several ways. Following are some tips to help avoid being ripped off or ending up spending the holidays with the Grinch.

Do Your Research

Especially if shopping for a payday loan online. This is where most of the scams can be found: through unsolicited e-mails and unprofessional or questionable behavior from any lender. You should never use a payday loan service that requires you to pay a fee up front - that is almost a sure sign that something is not legitimate about that business. Doing a little research, shopping around by speaking with friends and family members is a sure way to stay safe from online predators.

Avoid the Hole in the Wall

Certain payday loan lenders are really more extortionists than anything. If you visit a brick and mortar (walk-in store) payday lender, be sure to do business with a reputable one. Certain small ‘mom and pop’ operations exist or there that charge exorbitant fees - even higher than most payday lenders do in order to lend you money. Often these “businesses” are not even properly registered according to any state guidelines for offering the service they do. Payday loan stores have been popping up all over in most states, and you can usually find one, not too far from home, (or in the closest major city) that has franchises all over the state or country.

The best way to avoiid payday loan scam artists this season is to take a deep breath and proceed with caution and research rather than running out and signing on with the first so-called payday lender you can find – especially if they are not a well-known franchisee of the industry. At any rate, researching the fees charged by the industry can only save you money over time as not all legitimate payday lenders charge the same amount for their services or offer the same conditions on repayment of a loan.