It’s important for consumers to be aware of the latest tactics criminals are using to steal personal information and money. Recently, there has been an increase in online payday loan fraud. Payday loans are small, short-term loans typically used by those who quickly need cash, but this solution comes at a high cost, including very high interest rates and quick repayment – usually the borrower’s next payday.
Here’s how the online payday loan scheme works:
- The consumer thinks they’re applying for a payday loan or other short-term loan, but the website is fake and was designed by criminals to steal personal data.
- The online “application” has consumers provide their credit union or bank account number, routing number and password with the promise of loan funds being transferred to their account.
- The crook then deposits a counterfeit check for the loan via remote deposit capture, which is used to digitally scan checks and deposit them electronically, rather than in-person at a financial institution.
- Using the consumer’s information, the criminal can take over the victim’s account and transfer money out.
Remember these tips to avoid this scam:
- Never share your passwords with anyone – It’s also a smart practice to create strong, unique passwords with a mix of letters, numbers and symbols.
- Use extreme caution when sharing personal information online – Watch out for impersonators and fake websites, and make sure you know who is getting your information – research sites and companies to ensure they’re legitimate. If a website seems strange or has an offer that seems too good to be true, never give your information.
Ultimately, try to find an alternative to payday loans so you’re not putting yourself at risk for fraud or committing to pay back outrageous interest on a payday loan. If you find yourself in need of cash quickly, call Michigan First anytime at 800.664.3828 to learn about the loan options we offer.