BBB warns against predatory loan scams and offers advice to protect consumers

The Better Business Bureau (BBB) ​​warns consumers about the dangers of predatory loan scams.

According to the BBB, a recent study shows that between 2019 and 2021, the scam tracker received more than 7,800 reports of loan and debt collection scams, representing more than $4 million in losses.

Scammers posing as payday loan companies or debt collectors use stolen financial information to trick customers into paying using hard-to-trace sources like gift cards, payment apps, and money orders.

“Never pay a fee up front, also read the fine print of any contract and make sure your payday lender if you’re using one is licensed in the state of Minnesota,” said BBB’s Bao Vang.

Here are five ways scammers try to lure you:

  • Steal information about payday loan customers.
  • Scammers offer to take out payday loans or pressure customers into believing they still owe debt.
  • They also pose as debt collectors.
  • Scammers can also request payment through hard-to-trace sources such as gift cards, payment apps, and money orders.
  • They can also threaten legal consequences if you don’t act immediately.

The BBB says consumers should be aware of the following:

  • Unexpected calls to apply for a loan or collect a debt.
  • Loan offers that ask for a fee before a loan.
  • Comparison of short-term interest rates.
  • The handing over of any personal information, including bank details.

If you think you’ve come across a scam, CLICK HERE to report it to the BBB.

Joseph E. Golightly