Warning Signs Your Online Payday Loan is a Scam

Running low on funds because of an unexpected expense can be a stressful event for anyone. To make the situation a little easier, there are some important tips to follow when seeking a payday loan to avoid a potential scam.  It is very important to make sure you’re dealing with a legitimate lender before you provide your information to them.

Signs the Online Payday Loan is a Scam

Online scams can be difficult to spot and when you are in a financial jam, you may not notice some of them. As technology gets savvier, the thieves and scammers look for ways to stay a step ahead of consumers.

Upfront Fees

A common online loan scam is asking for a fee to be paid before they send the loan. They might claim the fee is for insurance, administrative fees, the first down-payment, or for setting up or securing the loan. If you pay the fee, you will never hear from them again and your money will be gone. The charge or type may vary, but no fee should be paid to obtain an online loan prior to receiving the funds.

Licenses and Registration

Any personal payday lender must be registered and licensed in the state they are operating. Reputable lenders will post their license on their website. You can also check with the state’s Attorney General’s website to find their registration and look for complaints on a lender.

Some lenders operate outside of state guidelines using a tribal charter. Be wary of these lenders as they do not have to follow state guidelines and the fees they charge are significantly higher than a state licensed lender.

Cold Calling

If a loan company contacts you without any request for information from you, avoid them. Often, they send you an email with a great offer that changes dramatically after they obtain your personal information. Legitimate online lenders can be found very easily through search providers like Google, Bing, Yahoo, etc.

Check the Email Address

If you do receive an email that seems legit, check the email address it came from. If the company name is followed by anything other than their domain name, it is very likely a phishing email. Do not click on anything within the email.

Better Business Bureau

All legitimate online lending companies should have a rating with the Better Business Bureau. Some will post this rating on their site and some will not, but it’s very easy to check with the BBB for your particular area.

Reviews

In this day and age, reviews from a reputable source are very helpful in determining if an online company is a good company to do business. Google reviews is probably the most common way to know that an online company is a good one.

Remarketers

Also be wary of companies that are not actual lenders. Many will tell you in the fine print of the website that they not a lender. They might be a real marketing company, but if you provide your information to them, they will sell it as many times as possible. That means your personal data just went to many companies in mere seconds.

Do Your Homework

Anytime you provide your personal information to an online company, it’s important to do a little homework before doing so. This way, you can make sure your information will be safe. Nothing is worse than being in a financial bind to then be taken advantage of by a scam. Lending Bear hopes these tips to avoid an online payday loan scam will provide you with enough ammunition to make sure it doesn’t happen to you.

If you are looking for a payday loan from a reliable source, Lending Bear can help! Simply visit your nearest Lending Bear branch or apply online today to speak with one of our friendly and professional team members.