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Payday Loan Scams 2.0: Things Just Got Worse

Payday Loan Scams 2.0: Things Just Got Worse
September 28, 2012
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Payday loan scams, when thieves randomly call victims and talk them into paying for a loan they never took, have been going down for years. In one of the largest known cases, the Federal Trade Commission busted a group that made more than 2.7 million calls to 600,000 different phone numbers, collecting more than $5.2 million.

But oh, just wait, it gets worse. As Krebs On Security pointed out this week, a website that sells personal information——to anyone with a few dollars to spare, is likely populating data with information from payday loan sites. Much like their brick-and-mortar counterparts, online payday websites offer quick loans to desperate customers. Most are believed to be scams intent on ripping off the customers’ personal information.

Investigating the website, the Krebs team purchased 80 personal records for about $20. “Each includes the following data: a record number, date of record acquisition, status of application (rejected/approved/pending), and the applican's name, email address, physical address, phone number, Social Security number, date of birth, bank name, account and routing number, employer name, and the length of time at the current job,” Krebs wrote on his blog. “These records are sold in bulk, with per-record prices ranging from 16 to 25 cents depending on volume.”

After making phone calls to the names on his purchased records, Krebs discovered a pattern: All of them had applied online for a payday loan  around the “date of record acquisition” shown in the purchased file. One victim reported:

“Not long after that, I started getting calls from a so-called collection agency for payday loans that I never took,” Samantha explained in an email. “The people calling had heavy Indian accents and were posing as process servers for the state of Virginia, police officers, or just straight out threatening me. Luckily, I never verified my information with these people and filed complaints with the Federal Trade Commission and the state of Virginia. The FTC has since busted some of these ‘companies’ for these fake collection calls.”

As we’ve pointed out before, most phony collection callers give themselves away by sheer stupidity and bad manners. Other warning signs:

  1. Caller tries to collect payment for a loan you never had;
  2. Caller won’t divulge a mailing address or phone number;
  3. Caller requests personal, financial or sensitive information;
  4. Caller threatens to have you arrested or to report you to a law enforcement agency to pay.

Most importantly, never volunteer personal information to any company or business that calls you. Ask for a secure callback number, and don’t take ‘no’ for an answer.

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