Protecting the Rights of Consumers For Over 25 Years

Over the past few weeks, in particular, scammers have contacted Illinois residents claiming that they have been pre-approved for a loan, and then asking them to purchase a prepaid debit card or wire money as a “processing fee” or “good faith deposit.” In other cases, scammers seek to collect on “unpaid” payday loan debt, often threatening arrest or legal action or demanding personal financial information over the phone.

“Scammers often use the reputation of a legitimate, respected business to con victims out of their money,” said Patrick O’Shaughnessy, president and CEO of Advance America. “Legitimate payday lenders such as Advance America are highly regulated at both the state and federal level and will never use the kind of fraudulent and illegal tactics employed by scam artists.”

Advance America urges consumers to identify the warning signs of financial fraud and follow these tips for avoiding payday loan and debt collection scams. If individuals suspect being scammed, they should report it immediately to local law enforcement and to the lender that the scammer claims to represent. Advance America customers can call 888-310-4238.

Learn the signs of a scam

Federal law strictly regulates how real bill collectors and loan agents can do business. The federal Fair Debt Collection Practices Act (FDCPA) specifically prohibits debt collectors from being abusive, unfair or deceptive in trying to collect a debt. The law specifically says debt collectors cannot threaten consumers with arrest or jail time if they don’t pay their bill. If someone claims you will face criminal prosecution unless you immediately wire them money, it’s almost certainly a scam.

Scammers may also claim that you have been pre-approved for a loan, and then require you to purchase a prepaid debit card or wire money as a “processing fee” or “good faith deposit.” Others may really be identity thieves out to get your personal or financial information.

How to Avoid Scams:

In addition to understanding how lenders and bill collectors can operate, consumers should also take steps to protect themselves, including:

• Never give personal information such as your Social Security number or bank account information online or over the phone without verifying that you are working with a legitimate lender or bill collector. To verify, call the establishment back using a known number, such as the number listed on your statement or on the back of your credit/debit card.
• Be suspicious of any email with urgent requests for personal financial information. If an email demands immediate action or makes upsetting or exciting false statements, it’s likely a scam.
• Verify company licenses when applying for a loan online. Legitimate lenders will display state licenses on their websites to verify that they are full-service, licensed lenders complying with state and federal laws.
• Never wire money or provide prepaid debit card information to a lender claiming you have been pre-approved for a loan and must make an initial payment as a “show of good faith.”
• Keep anti-virus, anti-malware, and spam email protection software up to date on all your computing devices.
• Maintain a record of all outstanding debt, and include lender contact information.
• Regularly check your bank, credit and debit card statements to ensure there are no unauthorized transactions. Likewise, check your credit report (using Equifax, Experian, or TransUnion) every four months on a rotating basis; credit reports are often one of the first places where signs of identity theft or fraud will appear.
• If someone approaches you claiming you owe them a debt, demand they provide written proof of the debt as the law requires – especially if it’s for a charge you don’t recognize.