BBB warns against predatory payday loan companies

WICHITA FALLS, Texas (KAUZ) — The Better Business Bureau is warning of predatory payday loan companies and scammers taking advantage of inconsistent laws and stolen data.

Amid inflation, the COVID-19 pandemic, and lost jobs, many consumers have turned to payday loans for short-term solutions, according to the BBB. This has reportedly allowed predatory lenders to thrive; Many borrowers still struggle with sky-high interest rates and opaque fees. It also created a fertile environment for scammers.

The BBB published the following highlights and observations from a study:

  • From 2019 to July 2022, the BBB received nearly 3,000 customer complaints about payday loan companies with a disputed dollar amount of nearly $3 million
  • The payday loan marketplace is a mix of real payday loan companies and scammers – these scammers pose as payday loan lenders or payday loan collectors; Online payday loans make it harder to tell the difference
  • Although legal, some real payday loan companies may use fraudulent practices with triple-digit interest rates and opaque loan fees
  • Whether real or fake, the payday loan solution can leave consumers even deeper in debt, with some facing bankruptcy, eviction and despair

BBB officials are advising consumers to carefully research all of their loan options before signing anything to take out a short-term loan. They also recommend checking the terms of a payday loan.

For more information, visit the BBB, Click here.

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