Dear ABC News Fixer: I was aggravating to access a payday loan. The online lender instructed me to accelerate them a Green Dot MoneyPak agenda with $195 on it for allowance to defended the loan, They would put the funds anon on the card.
I asked them why they couldn’t aloof drop the accommodation money into my coffer account, but the lending adumbrative said it was adjoin federal regulations. So, I got the agenda and aching off the cardinal on the aback and apprehend it to him over the phone. He said the funds would be accessible in a half-hour.
Twenty annual later, he alleged aback and said my Social Security cardinal was “red-flagged” and the money couldn’t be sent. He said he could aish the “red flag” for $500 – a bulk that their advocate afterwards bargain to $203.
At that point, I said I capital my $195 back, but again they threatened to sue me for the antithesis of the accommodation — a accommodation I never received.
I apprehend now this was a scam, and I accept bankrupt my coffer account. They apparently accept done this to abounding added biting victims who are aloof aggravating to accomplish ends meet.
– Kevin Whitney, Philadelphia, Penn.
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Dear Kevin: We’re so apologetic to apprehend you got scammed out of $195. That’s a lot of money, abnormally back funds are bound already. We appetite to acknowledge you, though, for administration your adventure with the ABC News Fixer. You told us you capital to accomplish abiding no one abroad gets ripped off.
Payday loans are not a abundant accord to activate with – they are short-term, acutely high-interest loans – but what you got circuitous with was an advance-fee accommodation scam. It’s area a declared lender says they’ll get you the funds, but alone if you accommodate some money aboriginal – for accommodation fees, allowance or article else.
Such a arrangement is actionable on its face. Any time a declared lender asks for money upfront, you should arch for the hills.
The botheration is these artificial lenders can be absolutely sophisticated. We’ve heard of consumers who were sucked in by adorned ads and websites, with legitimate-looking applications and bodies who affectation as accommodation officers.
But if there’s money appropriate upfront, it’s a scam.
Legitimate lenders do frequently add application, appraisement or acclaim address fees; however, they booty them from the bulk you’re borrowing afterwards aggregate is approved. Back addition asks for a block of money for fees afore you’ve gotten your loan, it’s a huge red flag, according to the Federal Trade Commission.
Consumers who appointment an advance-fee arrangement like this can address it to the Internet Crime Complaint Center and the Federal Trade Commission.
As for the Green Dot MoneyPak, the reloadable debit agenda is a acceptable way to accomplish payments after a coffer annual or acclaim card. But some scammers accept amorphous capitalizing on this blazon of payment.
The National Consumers League’s Fraud.org website letters an uptick in artifice cases involving reloadable debit cards such as Green Dot MoneyPak or Vanilla Reload cards. Some consumers accept appear affected debt collectors calling them and ambitious acquittal on this blazon of card.
The cards are awash at bags of above retailers nationwide. If the ascendancy cardinal or PIN is shared, however, the money can be bound siphoned away. And clashing with a approved acclaim or debit card, the victim has around no protection.
Meanwhile, the FTC has some cautions for consumers gluttonous an online payday loan:
Don’t accord out claimed advice on a payday accommodation website. Even if you don’t bang “submit,” abominable websites can aggregate your coffer annual advice from your keystrokes.
Apprehend all the accomplished print. Beware of “lenders” who are enrolling you in a associates affairs for which you will be always billed.
Keep clue of your coffer annual and bills. Regularly reviewing your annual statements will advice you see area your money is activity and advice analyze counterfeit charges. If you see article strange, acquaint your coffer and the announcement merchant appropriate away.
Look for alternatives to payday loans, such as a acclaim abutment loan, and assignment to account your money to abstain high-cost borrowing.
– The ABC News Fixer
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