Payday Loans out, Advance-Fee Lending in?

[moneysense]

Payday lenders were a frequent site around our military bases, and they were charging our soldiers up to 400% interest on the loans that were gotten at some of these places.

With military personnell getting regular paychecks, they are prime targets for scam artists with get rich quick schemes.

The latest of these are called Advance-Fee lending. They tell the potential borrowers that they are "credit risks", and
ask the potential borrowers to pay $900 to $1800 up front before they can obtain a loan. Then the money disappears and the people have no option but to complain to the Better Business Bureau which has a military line to help educate military consumers with families.

What these military personell can do is get an interest free loan through a military emergency relief fund. They can also join an onbase credit union that offers short-term loans at competitive rates. Car repairs are one of the things that are eligible for this type of a loan.

[dollardaze]

Sorry, but what do you mean - the money disappears?? Do you mean that the military personnel never gets the loan that they've applied for after giving the lender all that cash??

If this is the case, then these lenders definitely need to be put out of business, and those military personnel that have lost their money to this scheme needs to be taking some legal action against them.

[moneysense]

Yes, their initial payment disappears and they never get the loan that they wanted. But, it isnt only the military personell that are being scammed by this, its becoming very popular everywhere, and people need to aware of this type of scam and not fall for it.

[dollardaze]

Thank you so much for posting this information. I wasn't aware of this at all until I saw it in here. Our economy stinks right now, but these scammers seem to come up with different scams all the time, not only in these times when the economy is in the toilet.

I hope the government puts a stop to this practice, and does it soon!!