Tucson consumers and hundreds of other consumers across the nation say they have been victimized by an online payday loan scheme. Better Business Bureau serving Southern Arizona warns the operation involves at least seven questionable businesses, all claiming the same Las Vegas address.

In every case, the complainants told BBB that the businesses used electronic checks to take $30 from their accounts. Some consumers said the companies told them the charges were payday loan application fees, even though the consumers maintain they never formally applied for loans. Other consumers said they have no idea where the businesses got their banking information or how they were able to access their accounts.

More than 300 people, including three Tucson consumers, have filed complaints against the businesses, most of them in the past several months.

The businesses identified by the BBB are Capital Advance Capitol (also known as Loan Assistance), Ideal Advance, LoanTree Advances, Pacific Advances, Palm Loan Advances, Vantage Funding, and Your Loan Funding. All list addresses at 2780 S. Jones Blvd., Suite 3675, in Las Vegas, NV, and most have virtually identical websites. All have “F” ratings with BBB for failing to respond to complaints.

Several of the complainants said they have been promised refunds repeatedly, but never received them.  Several also said they were promised $1,000 gasoline vouchers in lieu of a refund, but never received those either.

BBB has found six nearly identical websites for the companies, with only the businesses’ names changed.  “Get up to $1,000 in as fast as 1 hour!” claim the sites. “4 out of every five applicants is approved on the spot! Get approved for a loan regardless of your credit score or credit history!”

All of the sites have identical testimonials, only the company’s names change.

Payday loans are illegal in the state of Arizona. This includes not only payday loans from brick and mortar businesses, but from online lenders as well. Arizona classifies any loan with an annual interest rate above 36 percent to be a payday loan.

The BBB offers the following tips to avoid losing money in an online payday loan scheme:

• Promptly Report any online payday lenders you find operating in Arizona to the Attorney General by filing a complaint at www.azag.gov.
• Be extremely cautious about providing banking or other personal information to strangers or on unknown or unverified websites.
• Read and understand all “terms and conditions” printed on a website.

For more information on online payday loans, or to research a business, visit www.tucson.bbb.org or call (520)888-5353.

Better Business Bureau of Southern Arizona is warning consumers against giving out personal information to unknown callers. Scammers have recently been using the name of legitimate law firms to trick victims across the country into giving out bank information, credit card numbers and other private information.

Victims report receiving calls from individuals using a fake name and an untraceable phone number, who say they work with a law firm in the victim’s area.

The callers claim the firm is suing the victim on behalf of a payday loan provider. The caller goes on to say the victim defaulted on a loan and demands payment and other personal information. Victims may not remember taking out such a loan, but some cases have been linked to security breaches at financial institutions.

There are other variations of this scam. Callers pretend to be law enforcement or government officials (more…)

Online payday loans are marketed as a quick solution for short-term cash flow problems. The loans can trap consumers in the same cycle of debt and despair as brick-and-mortar lenders but with less protection from regulators.

Some consider payday lenders to be today’s loan sharks. They reel customers in with websites promising easy money, then hook them into short-term high-interest loans that customers roll over to new loans when they can’t pay.

Many online lenders fail to obtain licenses, making it hard for regulators to have any control over them. Some are based abroad, which makes it impossible for authorities to enforce state lending laws or punish lenders that violate the laws. With hundreds of illegal lenders online, the only protection is to avoid borrowing from them in the first place.

Recently, applicants for online payday lenders complained that they were enrolled in discount clubs, which then debited consumers’ bank accounts without their knowledge. One club had more than 500 complaints filed against it, none of which were resolved. Consumers complained that the unexpected debits caused them to incur overdraft fees in addition to the loss of their money.

Consumers also have been asked for payment on loans they never received. In some cases, they applied for loans but were turned down or declined the loan. They then received multiple abusive or threatening phone calls seeking to collect the money.

The calls came from overseas, and the callers had consumers’ private information, such as Social Security numbers, addresses or sources of income. Authorities could not determine how the callers obtained the information, except that consumers had applied online for loans.

The Task Force recommends that consumers look for other means of meeting a short-term cash crisis before turning to payday loans as a last resort. An employer may be willing to give an advance on a worker’s pay, or a credit card may be used to tide a family over until payday, though that, too, can be a trap. Other tips:

• Never pay an advance fee in exchange for a promise of a loan. These are almost always scams and, once you have paid, you likely will never hear from the thieves again. The fees may be disguised as mandatory insurance or some other product the lender says is needed to obtain the loan.
• Be extremely cautious when giving out any personal information online, such as Social Security and bank account numbers. Be alert for websites that force you to give that information before even telling you whether you qualify for a loan.
• Read all information on the site very carefully, searching for hidden fees or disclaimers. Often, a company’s “terms and conditions” can be several pages long and contain critical information for consumers. Some consumers have had difficulty printing the conditions because of how the site is set up. That’s a red flag.
• Understand that many disreputable companies exaggerate or entirely fabricate testimonials.  Be suspicious of testimonials and ask for references you can call and speak with.