Watch Out for This Cash Advance Loan Scam
Short term installment loans can be a lifesaver when unexpected bills come your way, or you simply need to pay bills. You check your mail and find a slew of bills that need to be paid ASAP. Bills you completely forgot about. You check your bank account and realize you’re down to your last few dollars. What do you do? You go into panic mode. You think, “How in the world will I pay this?”.
The only thing you can think of is to get a loan. But you have bad credit. You can’t apply for a traditional loan with low interest rates. You’ve heard about bad credit loans (AKA: bad credit installment loans), but you’ve always been weary. But now, you have no choice.
It’s a far too common situation. You are completely desperate and willing to do anything to get this debt off your back. Maybe this sounds familiar. And it’s the #1 reason the BBB is warning consumers about a new cash advance loan scam plaguing borrowers in the U.S.
Mary Floyd, a borrower looking to pay bills that recently piled up was one such victim.
“It’s pretty sad,” said Mary Floyd. “People like me, I need help right now.”
Floyd was simply trying to get back on her feet when she applied for the short term loan.
“Not the smartest thing to do these days, I learned that the hard way,” Floyd said.
Shortly after Floyd applied for the loan, she was contacted by the loan specialist. The “lender” asked for money before processing the loan. Out of desperation, Floyd paid the upfront fee from her online bank account.
However, she quickly regretted this decision. What happened next turned Floyd’s entire world upside down.
The scam lender took what little money she had in her bank account and stole her identity.
Jason Meza, San Antonio’s Regional Director for BBB said this type of upfront fee loan scam is becoming more commonplace.
“We’ve seen victims locally that have lost upwards of 10,000 plus dollars,” Meza said.
How to Make Sure This Doesn’t Happen to You
If a bad credit lender asks for any type of upfront fee before processing your loan, be careful. 99% of the time, it’s a scam. Here are a few red flags you should watch out for, along with tips on doing proper lender research.
- If the lender asks for an upfront fee, do not give them your bank account information or proceed with the loan application.
- Research any potential lender on the BBB website.
- You can also research lenders on the CFPB website and see how many complaints they’ve had
- Most legitimate lenders have at least a few reviews on the most popular social platforms like Facebook, Google, Yelp and more. Research all reviews to get an idea of the lender’s trustworthiness. You can also check out our guide to tribal loans to find a real lender.
Alternatives to a Bad Credit Loan
Another option you can take is this. Instead of applying for a loan, did you know there are simple and quick things you can do to earn money online? Indeed there is. You can check out our latest guide on 12 ways to earn money fast vs. applying for a bad credit loan.