Better Business Bureau releases new study on predatory payday loans

OMAHA, Neb. (WOWT) - A new study warns about predatory payday loans.

According to a new investigative study by the Better Business Bureau, predatory payday loan companies and fraudsters are stealing your information by tricking you into believing they know more about state laws than you do, by failing to explain the exact terms of the loan.

“I kept getting these text messages and phone calls in the early morning or late evening,” says one Nebraska woman who wishes to remain anonymous. “When I finally did speak to them on the phone, all they wanted was my social security number.”

The BBB says this is a major red flag. And unfortunately, it’s become an all too common scenario.

To add to the confusion, payday loan laws are handled on a state-to-state basis among the 32 states in which they are available. The BBB says a complicated web of regulations makes the impact of the industry difficult to track.

“The primary issue is that these loans carry triple-digit interest rates,” says the Vice President of communications and public relations for the BBB, Josh Planos. “And they’re compounded by the interest that is sometimes compounded weekly or monthly rather than annually.”

Here in Nebraska, lenders are prohibited from charging fees in excess of $15 per $100 loan. Additionally, loans are limited to $500.

“I actually had a friend that had her identity stolen and then there was some financial stuff there, so I just got lucky and didn’t have any of that done,” she says.

Most recently, 6 News received an email from another woman expressing concern about a mailer.

“I got the mail like I do every day, and saw this postcard and it concerned me a little bit because it said First National Bank of Omaha, we’re calling you to talk about your mortgage,” says this woman from Omaha who also wishes to remain anonymous. “It needs an immediate response, it’s time-sensitive.”

The BBB confirms this is yet another potential scam and one of several ways fraudsters are asking for and in some cases getting your information.

“This is something that absolutely affects your neighbor, your community here in Nebraska. It’s something to be on the lookout for,” says Planos.

The BBB advises you not to shy away from reporting a scam if you fall for it. They say the more people who know about it means the greater the likelihood that others will avoid becoming victimized.

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