Most people who have encountered economic hardships look for solutions to get a little bit of money to hold them over until pay day. For some, a solution is to get a “payday loan”. A pay day loan is a relatively small amount of money lent at a high rate of interest on the agreement that it will be repaid when the borrower receives their next paycheck. There are many types of payday loans, some are legitimate and some are scams. If you apply for a payday loan be aware of a few facts:
- Many payday loan companies are incorporated in Central and South America. Therefore, if they violate your consumer rights it will be very difficult to seek legal actions against them.
- Many payday loans in the United States are held by different Indian tribes which are exempt from Federal Laws. Therefore, if they violate your consumer rights it will be very difficult to seek legal action against them.
- You are opening yourself to the potential of identity theft. Many people who apply for these loans do so online and you may be providing your social security number and date of birth, etc to a con artist.
- If your identity gets stolen from a scam payday loan operations, file a police report immediately and also file a report with the FTC Commission. Very important that you do both to protect your credit and any loans that they attempt to receive in your name.
For information review the FTC website or the NY/NJ Attorney General’s Consumer office website.