By John Campbell
Beware cash advance companies that charge upfront fees for cash advances or payday loans. So-called companies that engage in this practice are often outright scammers. If you send them your hard earned money you’ll get nothing in return.
Legally, cash advance companies are prohibited from requiring potential borrowers to pay up front in order to get a loan or line of credit. Keep that in mind if a lender ever asks for you to pay before you can receive any funds. These “fees” can be cleverly disguised as “application fees,” “processing fees,” or insurance to protect the lender in case you can’t pay back the loan. With cash advances, the high interest rate you’ll pay when it comes time to repay is all the insurance a lender will ever need.
Beware of ads promising “guaranteed” loans or lines of credit regardless of your credit situation. These are often bait used by scammers to lure in unsuspecting consumers. Once you think you’re guaranteed to get some much needed cash you may be more inclined to take actions that you later on regret.
Never call a 900 phone line to apply for a cash advance or credit. You’ll be responsible for paying any charges on your phone bill and the lender will get a hefty fee from you regardless of whether or not you accept a loan or line of credit. The biggest red flag to avoid is any lender requiring you to pay an advance fee over Western Union or some other wire service. No legitimate lender will require you to send payments in such a manner. Scammers love to trick unsuspecting consumers into sending money via a wire service because there is no way to trace who received the funds.
Perhaps the biggest source of fraud today is the Internet, where scammers typically set up dummy Web sites with names very similar to legitimate lenders. For example, there could be a legitimate cash advance site known as payday express and a scammer sets up a similar site known as payday expres. Forget to type in the extra s in the address bar of your Web browser and you could be sent to a bogus site without even knowing it. Make sure all information on any Web site you visit can be verified and validated before doing any business with them. Check the Web address, listed company address and any other information on site. Google the company name and see if you can find any consumer reviews of the company’s performance.
And whatever you do, never share any personal or financial information with any potential lender unless you’re absolutely certain they’re legitimate. Otherwise you could be opening up your bank account or credit accounts to a scammer who can very quickly wipe them out. As always, keep in mind that if an offer seems too good to be true it probably is.
