BBB warns of predatory payday loan companies
WICHITA FALLS, Texas (KAUZ) - The Better Business Bureau is warning of predatory payday loan companies and fraudsters who thrive among uneven 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 contend with sky-high interest rates and opaque fees. It also created a fertile environment for scammers.
The BBB has released 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 nearing $3 million
- The payday loan marketplace is a mix of both real payday loan companies and scammers - these scammers pose as lenders or payday loan debt collectors; online payday lending makes it harder to tell the difference
- Though 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 buried even deeper in debt, with some facing bankruptcy, eviction and despair
BBB officials advise consumers to do careful research into all their borrowing options before signing anything to take out 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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