Feds: A payday loan scam can cost you more than you think
Feds are warning consumers that payday loan scams can cost them more than they think.
A federal task force has issued a new warning that payday loans are often the target of sophisticated scams.
The FTC says many borrowers take advantage of a loophole in the law that allows lenders to charge a “fee” for their services.
In doing so, they may not even realize that they are being charged a fee.
The federal agency says some of these charges can be up to $20 per loan, and some may be even higher.
It warns that borrowers may get a $100 credit or be charged interest of up to 15 percent.
The consumer watchdog group also notes that the FTC doesn’t know how many people are actually being scammed by payday loans.
But it said the numbers are increasing.
Feds: Federal task force warns consumers that a payday loan may cost them $50 or more per loan article FEDS says payday loans may be a new category of fraud and scams.
In addition to the payday loans, the FTC says there are other types of financial services that can be used for a payday payday loan.
It says the average payday loan is up to about $25 and that some payday lenders charge more than $50 per loan.
The government says consumers should be careful when shopping for payday loans because they may be charged additional fees for things like late fees, late fees that result in a default, and other fees that may not be disclosed to borrowers.