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Payday loan scam hits Illinois
By Oscar Monfort on Aug 31st, 2010
Illinois Attorney General Lisa Madigan has issued a consumer alert warning after receiving news of a debt collecting scam that is sweeping across the state. Walletpop, a business and finance news site, is reporting that a new wave of con artists posing as payday loan debt collectors have been harassing borrowers and emptying bank accounts.
Payday loans, also known as fast cash, are given to borrowers looking for income to pay for expenses in between paychecks. They are often issued with interest rates as high as 300 percent. Middle-to-low income families have heavily relied on payday loans as the economy slowly recovers.
Madigan says that these fraudsters have been using fictitious company names, such as Morgan & Associates, Federal Bureau of Investigators and DNR Recovery. She reminds borrowers that they cannot go to jail for debt and to not offer any personal information.
While payday loans offer quick solutions to debt, consolidation is another option for those looking to avoid the high interest rate. By combining debt and taking out a loan with a lower interest rate, borrowers can reduce monthly payments.
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