Payday loan scams victimize most financially vulnerable
Consumers have lost more than $3M over the last four years
InvestigateTV - Payday loans are high-cost, short term loans that are often a quick way for people to get cash before their next paycheck. Unfortunately, payday loan scams have cost consumers almost $500,000 this year.
Josh Planos with the Better Business Bureau said the con comes when bad actors pose as representatives from legal payday loan companies.
Planos explained that fraudsters will offer fake payday loans or trick customers into thinking they still owe money on a debt even after the debt is paid.
These scams typically cost victims an average of $1,000 per person and the frequency is increasing.
Planos reported that the BBB saw a 27% increase in payday loan scams from 2019 to 2021.
Senior Attorney Mark Glassman with the Federal Trade Commission said the uptick in payday loan scams means borrowers need to stay on high alert.
Glassman noted that the scams are targeted towards people who, in many cases, are already economically vulnerable.
Experts said one way to avoid falling victim is to skip the payday loan and instead, try working with your creditors to make payment arrangements.
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