Better Business Bureau warns of payday loan scams and predatory lending
SPRINGFIELD, Mo. (KY3) – As consumers lost their jobs and struggled to make ends meet during the COVID-19 pandemic, many turned to payday loans and other short-term solutions, with an increase in online solutions.
This has not only allowed predatory lenders to thrive, but many borrowers still face exorbitant interest rates and opaque fees; but also created a fertile environment for scammers, according to a new in-depth investigation by the Better Business Bureau (BBB).
“They have information. The names of the people, their addresses, the types of loans they have taken out, ”explains Brian Edwards, investigator for the BBB. “Sometimes even their social security number. So they can really be convincing.
Scammers posing as debt collectors call in hopes of convincing those who pick up their phone that they owe more on a loan.
And it works. The BBB reports that 7,834 reports have been filed on loan and debt collection scams.
“They will spend days or even weeks with people where they will continue to come up with different lines,” says Edwards. They will continue to offer this kind of way to keep people hooked.
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