Top Pitfalls If You Engage in Online Predatory Loans; Lessons from our Predatory Hotline Callers
- You sign away your right to keep your personal information private, even if you only apply for a loan.
- Many borrowers only realize after the fact that once you put your name address phone number social security number and employment information into the form of an internet lender, it is sold, usually multiple times, to both other lenders and scammers. Some borrowers end out getting deposits into their account they did not know about (not from the lender they borrowed from) or think they requested, only to then have much more money get taken out on subsequent paydays, without the ability to simply give back the money if they didn’t want it.
- Many online lenders have weak security and safeguards to prevent hackers from getting borrower information. Many also do not put in place sufficient safeguards to prevent scammers and fake debt collectors from purchasing your information for the purpose of extorting money from the borrower later; in some cases several years later. See a related article. The FTC has been cracking down on such scams, a good reason to always file complaints with them, but more keep replacing the ones caught, ever tweaking their scams.
- This ACH authorization is easy to give, but hard to take away. Many lenders do not honor people’s requests to withdraw ACH authorization, and some banks and credit unions are not honoring borrower’s decisions to revoke authorization. This makes it harder to get control back over your account and over the money deposited into it later. Sadly, many borrowers are forced to leave the banks or credit unions that they had accounts with in order to finally escape online lenders and scammers.
- You may think you are getting a regular payday loan over the internet, but there are many “installment” lenders and “line of credit” who appear to be a payday loan, but whose loan products and their business practices can differ from payday lenders. For example, borrowers at one installment lender think they are borrowing $1500, but the company takes $500 “off the top” as a loan fee on top of the enormous interest fees, so that the borrower actually gets $1000 in hand but ends out paying back a loan on $1500.
Stuck in an Internet Payday Loan? See the steps you need to take to be free.
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