Consumers should be wary of sharing sensitive personal information
August 31, 2012
The Washington State Department of Financial Institutions (DFI) is urging Washington consumers to be cautious when providing sensitive personal information, such as date of birth, bank account numbers, and social security numbers, on websites that purport to offer payday loans. Many of these websites are so-called “lead-generator” websites, which then sell consumers’ personal data to companies which may, or may not, be licensed to offer payday loans in Washington State.
DFI's primary concern is that consumers have no control over who receives their personal information once provided to these websites. Specifically, consumers’ information may be sold or transferred to an entity which then conducts an advance fee loan scam.
DFI has recently received complaints that consumers who have provided their information to one or more lead-generator sites have subsequently been contacted by a purported payday lender. These consumers report that this purported lender used the name “Advance America” (a company currently licensed with DFI) and the address and telephone number of Check Masters (a company formerly licensed with DFI).
Consumers reported that the calls came from 206-462-5125, and that they had been given an e-mail address of firstname.lastname@example.org.
The purported lender stated that the prospective borrower must load money on a prepaid access card before the loan could be disbursed. This money was then taken from the consumer’s card, and no payday loan was ever provided.
Lead generator websites often appear to be payday lenders
Hundreds or even thousands of these websites are present on the Internet. Many of these websites make statements such as “What we do: payday loans” or “We provide a fast and secure way to get you a payday loan online.” However, in the small print, these websites may indicate that they are not lenders, but merely a “matching service.” Additionally, these companies may sell consumer information to third parties for telemarketing, e-mail marketing, and text message marketing. Below is a very small list of websites identified by DFI as “lead-generator” websites:
DFI urges consumers to:
- Verify the license of a payday lender in Washington State by calling 1-877-RING-DFI (746-4334) or verifying a license online at https://fortress.wa.gov/dfi/licenselu/dfi/licenseLU/.
- Read the fine print in any and all documents/terms of agreement you are asked to sign/agree to
- Submit complaints. If you have a complaint against a payday lender operating in Washington, file a complaint with DFI online at dfi.wa.gov/cs/complaint.htm.
- Consider Alternative Solutions: Ask about delaying or making payment arrangements on your non-interest bills like telephone and utility bills. Talk to a friend or family member about borrowing money. Ask your employer for an advance on your paycheck.
- Comparison Shop for the lowest fees and penalties. For example, some credit unions offer payday loans with lower fees.
- Borrow Only What You Can Afford To Pay Back
- Know When Your Payment Is Due – most online companies will be deducting your payment directly from your bank account.
- Take Advantage Of Organizations That Are Available To Help You With Your Financial Situation. Many organizations offer help with budgeting, credit repair, debt repayment, and more. Contact your local consumer credit counseling service or asset building coalition. Find Your Local Consumer Credit Counseling Service at http://www.nfcc.org/FirstStep/locator.cfm. Locate Your Local Asset Building Coalition at http://www.washingtonabc.org/node/29.
- Develop A Budget Plan for the future by making a realistic budget to help avoid the need to borrow for emergencies and unforeseen expenses.