'A BBB investigation into BlackRock Legal Group found the supposed company sending mailers to people, saying they owed on a debt from Advance America, a real payday lending company. Posing as debt collectors: Fraudsters will use names that sound like law firms to convince consumers they are collecting a debt. This is not a foolproof method, though, as scammers can spoof emails or even steal passwords to gain access to legitimate ones.' 'Legitimate companies usually don’t send messages from a Gmail or Yahoo account. 'If you get an email about a payday loan, check the info after the sign,' the BBB report says. Scammers will then try to convince people that they still owe money that in reality was already paid off.Ĭonsumers should also watch for some signs that the company is an imposter, such as emails coming from or addresses instead of the company name, or slight misspellings. Stolen information: If you've taken out a loan from a legitimate lender in the past, hackers could access your information and contact you posing as a representative of that company. Consumers have collectively lost millions to these scams, with the median amount lost per person in 2022 reaching $1,000. The BBB report lists a few different scenarios that make up more 3,000 payday lender-related scam complaints received since 2019. SAVINGS ADVICE: Got high-interest debt and no emergency fund? Then don't save for retirement right now.

The study also highlights how uneven state laws have allowed predatory payday loan companies to continue to thrive.įROM THE MISSISSIPPI DELTA: 'Sometimes we find ourselves at the mercy of payday loans' That makes it easier for them to offer fake loans, pressure people into believing they still owe money, pose as debt collectors or demand upfront payment for loans, said Josh Planos, vice president of communications and public relations for the BBB. The report issued this week said that new frauds are often leveraging information stolen from legitimate lenders in order to defraud people.ĭue to a boom in online payday lending companies in recent years, hackers are able to steal data and more easily imitate real lenders.

Watch Video: Obama, regulators to take on payday loan industryĪ new report from the Better Business Bureau warns consumers of numerous ways scammers have found a home within the shadows of the payday loan industry.

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