Better Business Bureau warns about payday loan scams and predatory lending
SPRINGFIELD, Mo. (KY3) - As consumers lost 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 not only allowed predatory lenders to thrive, but many borrowers still contend with sky-high interest rates and opaque fees; but also created a fertile environment for scammers, according to a new in-depth investigative study by Better Business Bureau (BBB).
“They have information. People’s names, addresses, types of loans that they’ve had,” Brian Edwards, an investigator for the BBB, says. “Sometimes even their social security number. So they really can be convincing.”
Scammers posing as debt collectors call hoping to convince those who pick up their phones that they owe more on a loan.
And it’s working. The BBB reports that 7,834 reports have been filed about the loan and debt collection scams.
“They’ll spend days or even weeks with people where they’ll keep coming up with different lines,” Edwards says. They’ll just kind of keep coming up with these kinds of kind of keeping people on the hook.”
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