Beware of loan scams

Amarillo, TX - Applying for a loan has become popular in our area due to the holidays but you may end up losing money if you trust the wrong company.

Whether it's online, in the mail, or a local business offering you a loan, there are red flags you should steer clear of.

We have some tips to help you pin-point a scam.

"I think consumers need to be educated. They need to be aware of what they're doing before they sign the papers, before they write a check, before they send any money, or make an agreement with any company," says Janna Kiehl, Better Business Bureau.

That's because the Better Business Bureau says many people in our area are becoming victim to pay day loan scams.

"They're going to provide toll-free numbers, they're going to tell you that you're guaranteed up front. They're going to make it very easy but then once they get you hooked it's going to be very difficult for you to go through the process," says Janna Kiehl, Better Business Bureau.

You should also beware of websites asking you to pay money up-front, this is illegal.

"Someone else is benefiting from that money and you're left empty handed and without the original loan that you asked for, so now your in double debt," says Janna Kiehl, Better Business Bureau

Several payday loan websites require you to give out your personal information immediately such as your social security number, banking information and even employment history which puts you at risk of having your identity stolen.

Consumer advocate Joe Ridout says thousands of people who've applied for online payday loans have their information distributed.

"We're not certain exactly how the information got into the scammers hands. It could be the Internet payday lender sold the information or it could be the Internet payday lender was hacked," says Joe Ridout, consumer advocate.

The customer ends up receiving threatening calls which usually end with a demand for money.

If you need a loan, the Better Business Bureau recommends you do your homework first.

A list of reliable business reviews can be found on their website at bbb.org.