The Turmoil Caused by an Online Payday Lender
Eileen St. Pierre, The Everyday Financial Planner
Google recently announced that starting July 13, it will no longer allow ads from payday lenders. In August 2014, I wrote about protecting yourself from online payday lenders. The Google announcement prompted me to write a follow-up to this blog post documenting just how much turmoil these lenders caused in someone’s life.
Online payday lenders prey on our over-reliance on filling out online forms.
The ads make it sound so easy to apply. You can do it in your pajamas, never having to leave the house. All of us, especially millennials, are so used to filling out forms online. The trouble is, we don’t think about saving copies of what we are inputting online. When you go back to try to retrieve your application, it’s no longer there. The damage is done – your information is captured.
They claim to need money from you to process your application.
Whatever you do, do not give the online lender access to your bank account to pay the processing fee! I know someone who did the next worst thing – he wired money via Western Union. There was no way to identify where this money was going. He actually ended up wiring money several times. It wasn’t until he pawned several items including his Apple watch to generate more cash that he realized he was being scammed.
You now need to monitor your credit for identity theft.
Who knows what these lenders will do with your personal information. I told my friend to pull his credit report at www.annualcreditreport.com to see if any fraudulent items were on there. The immediate cash crunch he found himself in had now become a dire financial situation. His options going forward were a lot more limited because of his involvement with the online payday lender.
What do you do if you suspect a loved one is involved with online payday lending? Contact your state’s Attorney General. The AG’s office can investigate whether the online lender is legitimate. The Consumer Financial Protection Bureau regulates these lenders at the federal level.
What’s your best defense? Never get involved with payday lenders in the first place.