Instant-cash scams falsely promise to pay individuals upfront cash for long-term assets such as employee, military or civil-service benefits, legal judgments and insurance policies. Other types of instant-cash scams involve payday loans.
In the traditional instant-cash scam, victims sign away their rights to long-term assets or benefits in exchange for the promise of instant cash they never receive. As a result of such scams, the U.S. Congress approved legislation in 1992 that makes it illegal for companies to offer veterans instant cash for their disability and pension benefits. Senator Bill Nelson notes that prior to this legislation, instant-cash scams had cost vets as much as two-thirds of their future benefits.
Some instant cash scams target payday loan borrowers. These scams take a variety of forms, including demands for upfront fees for loans the scammers never make and collection efforts from individuals who falsely claim to work for payday loan companies from which the victims have legitimate loans.