3231400982_94ae0f9b5c_zWhen you apply for a payday loan, it is out of financial need. No one ever said “I don’t need the money really, but I’ll get a cash advance just because I like the way my wallet looks when its full.” Of course not! But when times are tight, and you need money fast, you know you can always rely on a fast, direct payday loan.

Crooks and scammers know that, too. There are frequent news stories about people being ripped off by criminals who pretend to be affiliated with the loan industry. The newest scam making the rounds involves someone calling a payday loan user at their home to convince them they’ve broken the law.

How do these phone scams work, and how can you avoid them? Lucky for you, protecting yourself from these online schemers is easy once you know what to expect.

Phantom Phone Calls

One of the newest tricks involves the scammer calling a payday loan borrower at home, pretending to work for the government or a police agency.  They might even claim to be the Attorney General!

The caller will threaten the borrower with legal action unless a fine is paid immediately. They direct the borrower to use a Green Dot MoneyPak card, or a wire transfer like Western Union to pay off the “fine.”

With advances in hacking and block technology, these crooks find contact information for innocent borrowers, and then use a cloned phone number to make it appear to a caller ID that the call is legitimate and coming from a government office.

This trick has fooled hundreds of people in a very short time. Con artists can be very convincing over the phone, and make people believe they are in legal trouble, even facing serious jail time.

How to Handle It: Ask for a phone number where you can call them back. Using a Google search you can instantly determine if the government office in question, and the phone number they are using, are real. If you are still unsure, call the main switchboard for that government office and ask for the caller by name.

11980216643_35bb875d47_zWestern Union and Green Dot MoneyPak Cards

For people with bad credit, who can’t get a credit card, Green Dot cards are a lifesaver. They are prepaid debit cards that allow you to add or withdraw money, giving you the convenience of a card without the perils of borrowing money. However, these cards have proven to be just as helpful to criminals.

Green Dot cards are a favorite of the phone scammers, because they are virtually untraceable. Instead of asking you to send the money to them, they will “require” that you put the money on a Green Dot card, and then give them the number on the card. This way they can empty out all the funds into their own account, and leave no trace behind of who they are or where the money went.

It is important to point out, however, that in now way are Green Dot MoneyPak cards affiliated with anything illegal. Like Western Union, Green Dot is a professional, legitimate business that has simply been used by shady characters for their own ends.

Three Simple Rules to Beat the Scammers

Fortunately, all of these scammers follow the same guidelines. You can avoid getting ripped off by following these three very simple rules.

  1. Never pay up front for a loan. EVER.
  2. Never give out your debit or credit card information. EVER.
  3. See Rule #1, repeat

No matter how cyber crooks and high tech con men try to trick you, it always boils down to one thing – they need you to send them your money.  They need your help to steal from you, so keep your guard up!

No legitimate lender will ever require you to pay them up front. And so if you are being told to pay, or threatened to pay, just walk away and find a real payday lender.

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