More and more Canadian money lenders are raking in super high profits as fast, easy alternatives to traditional lending products, when in fact they are exceedingly more expensive.
Unfortunately, workers, families and small businesses keep getting submerged under the whims and caprices of these so-called “virtual lenders” or scammers – These victims get access to easy cash to solve all?their financial woes, only to start paying back with almost a hundred per cent interest rate.
In Canada,?a Payday loan is allowed under?section 347.1 of the Criminal offence code,?insomuch as the province of the borrower has put in place sufficient provincial laws guiding the provisioning of the loans.?But that hasn?t stopped lenders from exploiting?unsuspecting borrowers who become victims to an unending debt trap.
Ways To Avoid A Payday Loan Scam
But, how can you identify and avoid these payday loan scam??Luckily, there are a few good ways to know whether you are falling for a scam or you are carrying out a legitimate transaction.?The best way, in most cases, is to?be extra vigilant.
This article will show you some of the red flags you should desperately try to avoid to enjoy a healthy financial life.
Look Out For Red Flags
Beware of unsolicited emails saying you have been selected for a loan you never asked for. In most cases, these emails have led to scammers and even identity theft.
Be wary of unscrupulous?lenders who don’t have a location or an address and/or contact information that one can easily reach. Many at times, they are the bad guys! Beware of what they are offering.
If the lender does not have a visible office location and offers to contact you, instead of the other way around, that’s definitely a red flag! you should start looking for another option.
While credit checks or verifications are not always required for payday loans, a lender that only requires your bank account details may not be what you really expect, and you might get yourself into an ugly situation you never bargained for.
You don’t also have to pay money in advance in order to get a loan. If the lender demand for money prior to depositing the promised loan, it’s advisable you cancel the transaction.
Carry out Your Research
Even though you may be under pressure to get a loan as fast as possible, it is always advisable to take your time to research a potential lender to avoid being scammed.
The safest way to go about this is to run a search on the lender?s name online, together with the word ?complaint? or ?scam?. Carrying out this process will bring up any issues other people have experienced with a certain company, which will help you to make a decision.
In most cases, information about that lender may be missing on online. If this is the case, it may have a bad reputation so a careful?check with the Better Business Bureau and the financial regulators of your province can give you a better idea of who you are dealing with.
It is always best to work with registered and established lenders, as they have a reputation to protect and will very likely not try to scam you.
The major thing here is that?you should feel comfortable with the lending institution before you give away your personal bank account details to them. And weigh your options more carefully before you get involved in a payday loan.
