WICHITA FALLS, Texas (KAUZ) — The Better Business Bureau warns of predatory payday loan companies and fraudsters who thrive among unequal laws and stolen data.
Amid inflation, the COVID-19 pandemic and job losses, many consumers have turned to payday loans for short-term solutions, according to the BBB. This would have allowed predatory lenders to thrive; many borrowers are still struggling with exorbitant interest rates and opaque fees. It has also created a fertile environment for scammers.
The BBB has 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 market is a mix of genuine payday loan companies and scammers – these scammers pose as payday loan lenders or collectors; online payday loan makes it harder to tell the difference
- Although legal, some real payday loan companies may use deceptive practices with triple-digit interest rates and opaque loan fees.
- Whether real or fake, the payday loan solution can leave consumers even more in debt, with some facing bankruptcy, eviction and despair.
BBB officials advise consumers to research all their borrowing options thoroughly before signing anything for a short-term loan. They also recommend reviewing the terms and conditions of a payday loan.
Find more information on the BBB, Click here.
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