Pay Day Loan Scams Hit Hard

By: Lauren Zakalik Email
By: Lauren Zakalik Email

It's an issue so serious the attorney general's office has a division devoted to it.

"Especially with the economy the way it is, there are many scammers trying to take advantage of people who don't legitimately owe any debts," says Joy Yearout, Attorney General spokesman.

Bogus debt collectors are playing on people's insecurities to make a quick buck. The latest? One local woman says she's receiving threatening emails from a company called "US Cash Advance." She's already paid them more than $2,200-- even though she'd already paid off her payday loans. Now they want more.

Feeling helpless, she's turned to us.

"More likely than not, a legitimate debt collector will use telephone or written communication through mail to contact you," Yearout says.

Yearout says if it seems fishy, it probably is. The woman says the company is threatening to put her in jail if she doesn't pay them.

"That's a tell-tale sign. Federal law prohibits debt collectors from harrassing you," she says, and adds there's no such thing as "debtor's jail."

If you think you're being targetted by one of these companies, which Yearout says is a form of identity theft, even just a quick Google search may also help you figure things out. We did just that, and the first thing that pops up when you type in the name of the company is "scam." There are nearly 1 million results relating to US Cash Advance scam, people calling this "harrassment" and "embarrassing and slanderous." And a quick check of the Better Business Bureau calls "US Cash Advance" phony debt collectors and identity theft, with 76 complaints.

Michigan's AG has one complaint on record of this company.

Also, if you find lots of typos, errors and outlandish statements in their communications-- that should be warning enough.

"Bottom line is use common sense. Never turn over money or your bank account information to people you don't trust," Yearout says.

If you believe you've been scammed, contact your local law enforcement or the AG office. The link below will help.

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  • by Tammy Location: Rice on Aug 30, 2010 at 09:27 AM
    Lauren, thank you! Since this was on tv I have received more emails and threating phone calls. I have let them know that I know this is scam and if they keep bugging me I will report this to the FTC. I have not received any calls in last few days since. Thank you so much for all your help in this matter. You are the greatest!
  • by Anonymous on Aug 25, 2010 at 04:37 PM
    Where are the laws of what constitutes harassment?
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