Believe it or not, payday installment loan scams do exist. You might wonder how there could be a scam if the risk is on the lender by giving you the money. In fact, there are stories from consumers who had their bank accounts cleared out by their lender or the lender took out more than the agreed upon fee.
By definition, a scam is when you are abused above and beyond normal. The very high fees some lenders charge can be considered a scam. Payday installment loan scams may also be committed when a lender takes your money on your payday but takes more than what they agreed to. In some cases, they keep taking money out of your bank account, even after you’ve paid the payday installment loan in full.
This is the reason why it’s important to choose a trusted and reputable lender because you are giving them your bank account information and authorizing them to directly debit your account. An unscrupulous lender will abuse this information. Sometimes it is hard for you to get your money back because they claim to the bank that they have prior authorization.
Beside taking your money from your bank account, some scams are in the form of abusive debt collection schemes. These are not your normal debt collection calls. These scammers call consumers and threaten them with legal action unless they authorize payments from their bank accounts. In many cases, these collectors are very aggressive and threaten consumers.
Through the debt collector may have detailed information regarding the consumer (name, address, social security number), these are not legitimate collectors. They oftentimes use other lending companies and government agencies just to convince consumers that they are true debt collectors.
In case you receive debt collection calls that you suspect are scams, here are the list of things that you should do:
· Ask the debt collector for the name and address of the debt collection agency for which he or she works. Ask the collector to send you written information about the debt. Usually, legitimate debt collection agencies will send you a letter informing you of your debt because this is required under the federal Fair Debt Collection Practices Act. In case the caller won’t give you this information, hang up and report the call to your state attorney general and the FTC (Federal Trade Commission).
· Don’t be deceived by threats to make you pay for a debt that you’re not sure exists. In most cases of unpaid payday installment loans, the matter is taken first to the court and when given a judgment, then they can go after your wages or property.
· Remember that you can’t be arrested simply because you can’t afford to pay a debt on a payday installment loan. These are only civil cases and not criminal ones. But there are cases where consumers are jailed in connection with debts because they have failed to appear in court after a summons were issued.
In summary, consumers of payday installment loans must be careful not to fall into the hands of scams. Once you have fallen in, it’s hard to get out.