The Better Business Bureau (BBB) warns consumers about the dangers of bootleg loan fraud.
According to BBB, a recent study shows that the scam tracker received more than 7,800 credit and collection fraud reports between 2019 and 2021, representing a loss of more than $4 million.
Scammers posing as payday loan companies or debt collectors use stolen financial information to convince customers to pay using elusive sources such as gift cards, payment apps, and money orders.
“Never pay fees up front, read the fine print of a contract, and make sure your payday lender if you’re using one is licensed in the state of Minnesota,” said Bao Vang of the BBB.
Here are five ways scammers will try to lure you in:
- Steal information about payday loan customers.
- Scammers offer payday loans or trick customers into thinking they are still in debt.
- They also pose as debt collectors.
- Scammers can also request payment from sources that are difficult to trace, such as gift cards, payment apps, and money orders.
- They can also threaten legal action if you don’t act immediately.
According to the BBB, consumers should pay attention to the following:
- Unexpected calls to apply for a loan or collect debt.
- Loan offers that require a fee before a loan.
- Short-term interest rate comparison.
- Sharing personal information, including bank account information.
If you think you’ve come across a scam, CLICK HERE to report it to the BBB.