Protecting Yourself From Payday Loan Fraud

Online fraud is something that many of us are afraid of and there are those of us who will go so far as to act almost paranoid – going to extreme lengths to conceal our card details and even potentially avoiding using our cards online at all.

While this fear might be blown out of proportion in many cases, it is also not entirely unfounded and the internet actually provides a very convenient environment for fraudsters thanks to the anonymity it provides and the way it deals in purely information.

One such example of an online fraud that is occurring a lot lately involves payday loans, and police are getting more and more reports of such frauds. Here we will look at what these are, how to avoid them and what to do if you're a victim.

What is a Pay Day Loan Fraud?

Pay day loans refer to instant loans for relatively small amounts of money that are designed to be paid off in a single payment on an agreed date. This isn't like a mortgage then that you will pay back over the course of several years, but rather a small chunk of a few hundred or few thousand dollars that you will pay back at the end of the month. As such the interest rate is unfeasibly high which is why it's so important that it gets paid off quickly – normally on your next pay day hence the name.

This is completely legal, if an unwise move for many people, but it is open to abuse from fraudsters looking to get fast cash and not have to pay it back. What happens then is that the guilty party will take out their loan for a large sum of money, and but will then enter stolen card details to pay it back. They will then delete the initial details they put into the account so that they can't be traced, and the victim will know nothing of it until the lenders collect and the money instantly disappears from their account usually in several transactions that add up to a large sum.

What to do if You're a Victim

If this happens to you then it can of course be highly distressing but the good news is that it's fairly common so you should be able to get help relatively easily. The first port of call is to inform your bank, and if you're lucky and you haven't let your card out of your sight then they will refund the money immediately as long as you say that you're happy to involve the police.

If your bank doesn't offer this service then you should try contacting the loans company. This is bad for their reputation and suggests a problem with their security so they should be eager to help. Finally if they won't help then you should contact the police who should look into the problem on your behalf and deal with the loans company to get your money back.

Protecting Yourself

Protecting yourself is simply a matter of protecting your card details online. Where possible then use intermediary services like PayPal who can act as a go-between so that no one else needs to get your card details. Make sure you don't have any spyware on your computer, and be discerning whenever you enter your details into a new website. Meanwhile make sure you are checking your account regularly so that you can spot any unusual activity as soon as it occurs.

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