Scam Targeting Payday Loan Takers
Taking out a loan comes with risks, whether it is a loan with a bank or one with a payday lending service
. One of the most dangerous risks of taking a payday loan is yet another emergency or circumstances that prevent you from paying back the loan in time, thus incurring a penalty and/or higher interest rates.Unpleasant news from the US, however, reveals yet another risk. Late in June 2012, the Connecticut Department of Banking confirmed that a new scam has been spreading, targeting those who took out payday loans. People were told that their debt had been purchased and that they risked imprisonment if they didn't pay immediately.
The scammers seemed to have somehow gotten their hands on the information of payday loan applicants. This led to harassment in the form of incessant phone calls, to the debtors themselves, neighbors and worst of all, places of employment.
Representative of the banking department informed that complaints had been cropping up since the beginning of 2012. Latest calculation gave the average of 40 complaints a month. The scam targeted most payday loan takers, those who hadn't paid as well as those who had.
This was damaging and, as the banking commissioner said, "...a new low." Payday loan services were established for profit as well as helping those who were in need of quick cash. Done well, both parties would have mutually benefited from the transaction. Many debtors had finally found solution to their various predicaments since they used payday lending services, one that helped them quickly and, for practical purposes, anonymously.
With this new scam, the feelings of dread and exposed were what awaited people who were already in a trouble. Not to mention those first time loan takers who had never known debt collecting agencies. Imagine the shame and, worse, the risk of losing one's job over the continuous phone calls at work.
Most payday loan companies are legitimate businesses; law abiding businesses which nevertheless keep their eye closely on profit. They charge quite high interest rates in order to make said profit, as well as covering losses anticipated from their own practices of giving loans with little security.
A small number may turn out to be unscrupulous and more may turn out to be less sophisticated with their security when it comes to applicants' data. It is therefore imperative that you choose a well established payday loan company. One that keeps your information safe and does not sell your debt to a third party.
If you live in the UK and are interested in taking a loan from a payday loan company, OFT is your friend. The Office of Fair Trading licenses companies and brokers that have established themselves to be fair and compliant toward regulations. Look for license number on websites of payday loan companies to further assure the security of your information. Go to cashub.co.uk to learn more about safe payday lending experience.
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