Among the companies that offer online payday loans that are based in the United States are Speed Cash, LoanMart and MyCashNow. Those who are seeking to take out a loan online on their paychecks should be wary of scams involving online payday lenders. Some of these online lenders engage in unscrupulous practices that can leave the borrower in even deeper debt, notes the Federal Trade Commission (FTC) and the Better Business Bureau.Continue Reading
In 2013, the FTC took to court a number of online payday lenders for violating federal laws. Among the complaints filed against these companies include nondisclosure of the true cost of the loan, deceiving borrowers into giving them access to their bank accounts, harassment and threatening the borrowers with arrest for nonpayment.
One of the main tactics used by online lenders is charging the borrowers up to three times or more higher than the amount that was actually borrowed, according to a 2013 article on the FTC website. According to the terms of the loan, the lenders would automatically withdraw the loan together with the processing fee from the borrower's bank account at a predetermined date.
Instead of just a one-time transaction, however, the lender would make several withdrawals with the borrower being assessed a processing fee each time. If added up, borrowers often end up paying up to three times more than what they borrowed.Learn more about Personal Loans