Friday, September 13, 2013

BBB Warns Against Bad Payday Loan Lender Practices


Payday loan lenders have had their battles with the Better Business Bureau (BBB), but even the BBB is now distinguishing between the good lenders and the bad. When payday loan lending started with stores setting up locations in poor areas, there were no regulations and many lenders had some really bad practices. The BBB gave all of them a bad rank, and to this date, it is not payday loan lender friendly. Yes there are still those lenders who are not following best practices, but the BBB has had its own share of negative reports. The latest warning coming from the BBB is about fraudulent activity from online payday loan lenders which scammed almost 300 people out of money.

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The warnings are for three businesses which guaranteed large loan amounts within 24 hours when the customer provided their bank information. Online companies must have bank access to deposit the loan, but there are no debits until the chosen payoff date. These customers found that instead of receiving money within the 24 hours, their banks accounts were showing unauthorized debits for $29.95. When questioned, the customers were told that the fee was a membership fee or some kind of account protection which would be returned to them at a later date.

Those customers who did business with the fraudulent companies never got their money back as promised nor did they receive their loans. Do business with a company which has a history of best practices. Responsible direct payday loan lenders do make business transactions successful with customers each day. There are many success stories which are not broadcasted by the BBB or any other reporting agency. It is the negative which tends to be spread. When the negative is warning against certain companies or scams to watch out for, it is certainly most helpful to protect potential victims.

Here are some tips offered to consumers from the BBB:

*Check the contact information for the company before giving out your personal information. Call the phone number on the web page and get a feel for the company by talking to the customer representatives. Look for any signs of pressure to sign up quickly with their company. This is a sign of an aggressive lender and you will want to continue your search with another company.

*Before signing for the loan, read the terms and conditions carefully. Ask questions and expect clear answers. Those companies who beat around the bush and never fully answer the question are only trying to advantage of your vulnerability for quick cash. You should never sign any document when you have unanswered questions.

*If you get a pop-up box asking you to agree to purchase something, always close it without agreeing to anything. Beware that pop-ups are used by those phishing for information. Scams presenting themselves as a real company looking for access into your computer, banks or other personal information.

The BBB tried to contact the companies about the alleged complaints without resolve. The Attorney General is the best place to start when needing to report a problem with one of these lenders. The BBB is not the authority on businesses and it has had its own shaky reputation at times. If the direct payday loan lender has been in business for a while without complaints of fraudulent practices, then you will know that the company is safe to work with.


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