There has been increasing complaints related to payday installment loan fraud. In fact, in 2011 an Internet Crime Report conducted by the Internet Crime Complaint Center revealed receiving over 300,000 complaints about online loan fraud with a reported loss of $485.3 million.
The complaints related to payday installment loan fraud has dramatically increased to approximately 3.4% since 2010. In 2011, there were aproximately 26,000 complaints per month. According to Assistant Director of the FBI’s Cyber Division, Michael Welch, “Internet crime, especially online loan fraud, is a growing problem that affects computer users around the world and causes significant financial losses. With the help of the Internet Crime Complaint Center, an efficient way to report such infractions has been provided to help report suspicious e-mail activity, fraudulent lenders, websites and other Internet crimes. These reports help law enforcement make the connection between cases and identify criminals.”
With this in mind, many legislators have attempted to stop consumers from using payday installment loans. However, these loans are the most convenient financial resource for people to turn to for getting the instant cash they need. Payday installment loans offer the quickest solution to all people facing financial trouble. So, how can consumers protect themselves from online loan frauds?
Actually, there is nothing wrong with working with an online payday installment loan lender; however, you need to exercise caution when surfing online. There are several online loan scams that masquerade as legitimate lenders but are really aren‘t.
To protect yourself from being a victim of online loan frauds, here are some basic tips to keep in mind:
1. Do not consider unsolicited and too-good-to-be-true offers. One example of this is e-mail spam. A lender who keeps sending e-mail is most likely a fraud.
2. Beware of lenders who ask you to pay for an upfront fee. Never pay a fee to any online payday installment loan lender in order to have money deposited into your account. Legitimate lenders do not ask upfront fees, only processing fees.
3. Research the lender you will be dealing with thoroughly. Conduct extensive research regarding identification specifics of the lender to help you determine if they legitimate or not. Doing a random search will also help you find lenders who can offer you the best deals and rates suitable for your needs. You may also check the reputation of the lender with the Better Business Bureau.
4. Beware of electronic fund transfer agreements. EFT agreements allow your lender to have access to your bank accounts. Therefore, you need to research first your lender before giving them your bank account information.
5. As much as possible, report any suspicious-looking lenders and websites to the Better Business Bureau and other authorities. There is no better way to catch these culprits than to take action against them.