Telltale Signs of an Online Payday Loan Scam

Admittedly, the fast service and easy approval related to a payday loan are the main reasons cash-strapped individuals opt to avail of said credit, both online and offline. Although not all cash advance companies are scams, you must still beware of the bad apples in the basket. Otherwise, you will be exposing yourself to fraud and identity theft, among other troubling things.

With that said, here are a few telltale signs of a payday loan company that may very well turn out to be a scam.

Unsolicited E-Mails

Usually, spam e-mails are not the preferred marketing method employed by legitimate online companies offering cash advances. Thus, if you receive unsolicited e-mails from lending companies, or any online company whose website you have yet to visit for that matter, beware!

In all probability, you can become the next victim of a phishing scheme. If you don't know what phishing is, it is simply the process whereby scammers will attempt to secure sensitive information like your usernames, passwords, and most disturbing, your credit cards details.

Advance Fees

In some states, advance fees are strictly prohibited by law. If a lending company asks for advance payments in exchange for loan approval, under no circumstances should you pay said fees. Keep in mind that fees related to application, credit checks and other related expenses are to be deducted from the payday loan proceeds and only when said funds are in the process of being disbursed to the borrower.

Paid Solicitors

There are also companies that employ solicitors to persuade individuals with bad credits to avail of cash advances. There is nothing wrong with this per se but when said solicitors ask for professional fees for their services in exchange for loan approval, this is a scam. You will end up with lesser money in your hands and no payday loan in your pockets when you do fall for the likes of an oily solicitor.

No Privacy Policy and Secure Server

This is the one of the first, if not the first, sign you ought to look for in a company website. Without a privacy policy and a secure server, your personal details especially your credit card details will be at the mercy of online scam artists!

And even when the website appears to be legitimate, it pays to ask local authorities and browse consumer awareness sites for objective opinions. After all, you can't be too careful when your security and privacy are at stake.

Non-Compliance with Laws

Depending on the state where the payday loan company operates in, you must do your research that, indeed, it is in full compliance with the laws particularly with licensing regulations. Again, asking your local authorities about the company is a good first step. When you determine that usury and licensing laws have been violated, it should be your signal to find another lending company.

As a prospective consumer of a payday loan, you must exercise your responsibilities of which the most important is to educate yourself about the signs of online scams. After all, you cannot be fooled if and when you don't allow yourself to be fooled!