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Woman Loses $1,200 to Online Payday Loan Scam
October 21st, 2011
If you are thinking about taking a loan, be careful
Shayvonia Badger was having a hard time making ends meet. In the end she moved back home to stay with her mother. Later, becoming even more desperate, she went online looking for a payday loan. She saw an ad for Casa Loan Services of Miami, Fla.
“You qualify”
Badger talked to a company representative, who told her she qualified for a $7,500 loan and could get it quickly. “I would have the money the next day,” Badger said. The representative told Badger she had to wire $1,200 as collateral to the lender in Canada. After she sent the money, Casa Loan called back saying before it could give her the loan, she would have to send $500 more for Canadian taxes.
It’s a scam
“That’s when I realized it was a scam,” she said. She said the company promised to refund her money but never did. Now, when she calls their number she gets a recording. The Better Business Bureau calls this a classic advance fee loan scam.
The BBB said Casa Loans has an F-rating and uses a Miami address only to make the consumers think it is based in the United States when in fact it is in Canada.
Classic advance fee loan scam
“It’s a scam,” said BBB representative Tom Bartholomy. “There is no legitimate lending company out there that’s going to charge you an advance fee. Sending a money order to Canada to get your loan just doesn’t happen.” Badger now says be careful. “Don’t trust everything that pops up on the Internet.” She now realizes she is not getting her $1,200 back, an expensive lesson learned the hard way.
Beware Payday Loans Warns Iowa’s Attorney General
June 29th, 2011
Especially beware of online payday loans
Iowa Attorney General Tom Miller warned the public about payday loans In a press release Tuesday. Miller’s statement says that consumers should be wary of them, especially online payday loans.
Information
The Attorney General described how a Payday Loan works: For $100 in cash now, you write the lender a check for $116.67, which is cashed in a week or two. A $16.67 fee for a two-week, $100 loan works out to an APR interest rate of over 434%. In comparison, even a very expensive credit card would only charge around 24% APR – that ends up being a 92 cent fee for that same $100.
When you are desperate
“Of course when you are in a situation where you are trying to make ends meet and you are looking for any option to keep the cash flow going at home, one of those options is a payday loan. And we are tying to let people know, be very careful before you consider a payday loan. They are very expensive, they have fees up-front and they are at an astronomically high interest rate. So be very careful before entering into any kind of agreement with a payday loan lender,” said Geoff Greenwood, Communications Director with the Iowa Attorney General’s Office.
Online payday loans
Another area that the Attorney General is very concerned about is online payday loans. These loans are actually illegal in Iowa if the lender is not licensed by the state and does not have a physical presence in the state. The Attorney General recommends for consumers not to use online payday loans, so that consumers are not getting scammed online.
Got a complaint?
The Attorney General’s Office asks that if you feel that you are being taken advantage of or you would like to file a complaint, contact the Attorney General’s Consumer Protection Division in Des Moines at 515-281-5926 or 888-777-4590.
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