As part of OLA’s ongoing mission to educate consumers about short-term, small-dollar loans, here are tips to ensure that consumers are well-informed before taking out a short-term loan. Ensuring responsible use of online short-term loans is the responsibility of both the online lender and the consumer.
Never borrow more than you can afford
Sometimes the unavoidable occurs, car repairs, an unexpected illness, or other emergencies, that take a bite out of our budget. If you’re in a position where you find yourself in need of a short-term loan, find out exactly what you will be required to pay back, when your payments are due and how much those payments will be. If you know at the outset you won’t be able to make the payments, taking out a short-term loan may put you in a worse position than you are in.
Avoid taking out loans with multiple lenders
Most responsible lenders cap the number of times a customer can roll over a loan. Don’t get around this by using a loan from one payday lender to pay off another. This practice can cause more fees and an endless cycle of debt.
Get the most bang for your buck
If you sign up for the first company you see online, you can pay more than necessary. Comparison shopping is the smart thing to do when considering a payday loan. And because the Internet has forced companies to make transparency a top priority, why not shop for the best possible company for the best possible price?
Watch out for “trigger terms”
Trigger terms are words or phrases that when used in advertising requires the presentation of the terms of a credit agreement so that individuals can compare credit offers on a fair and equal basis. Any advertisements that include trigger terms must include disclosures that a consumer should read carefully. Trigger terms may include: “Borrow now for just $10 per $100” or “only [x]% interest.”
Always remember the website you got your online short-term loan from
You should know exactly where your short-term loan is coming from. If you have unexpected problems with paying your loan back, contact your lender immediately to work out a plan that will allow you pay back the loan without taking a new one or defaulting on the original loan. Lenders may use third parties to initially market their company, so make sure you know who your direct lender is.
Keep any paperwork, emails, contacts, and other information you receive from a short-term loan company
This information is equally crucial because it will tell you the loan, when your payments are due, how much is due, and who to contact in case you have problems. Keep all of this information in one safe place so you have easy access to it in case you need it.
Read the lender’s terms and conditions
While likely lengthy, the terms and conditions outline the responsibilities of you and the lender. It’s important you understand these and know your rights.
Don’t submit personal information like your Social Security number online without checking the security of your personal information
Applying for an online loan requires you to submit personal information including your bank account information. Look for information on the lending website about protection and security of your personal information. OLA encourages its members to display the OLA logo on their websites so consumers know they can borrow with confidence.
If you have a question, ask
Most lenders will be helpful to a potential customer and understand taking out a loan is a big deal. If you have any questions or concerns, just ask. If you don’t receive the answers you want, or are dissatisfied with the service, that lender may not be right for you.
If a debt collection agency calls you, even if you recognize the debt, remember to get the following:
- Amount of the debt
- Name of debt collection agency
- Name of the original creditor
- A call-back number to a phone answered by a live person
Suspicious Email? Anyone Can Help Detect Fraud
Email is a vital tool in our everyday lives. Unfortunately, it has also become a method of choice for financial criminals to conduct scams and fraud against consumers.
Trust your gut if you get an email that seems fishy, and don’t take the bait. Legitimate financial providers will never ask you to email personal information such as account numbers, Social Security numbers, or your online IDs and passwords. If anyone asks you for this information out of the blue, chances are it’s a trap. It’s a scam called “phishing,” and it can be used to steal your money, valuable information, or identity.
The Online Lenders Alliance has noticed an increase in phishing attacks and other scams coming from Google email addresses. OLA has been working with Google to report the email addresses of wrongdoers.
If you receive a suspicious email, you should know that the tools for reporting it are built into most email programs. If you’re a Gmail user, click the down arrow that is next to the reply arrow, and click on “report phishing.” Other service providers have similar shortcuts to make it easy to report problems.
And there’s more you can do. You can actually help OLA help Google track down offenders by calling us with important information on suspicious emails you’ve received. Anyone can be a detective and capture the full header from an email, using Google’s “Message Header Tool.” Here’s how to read an email header:
- Open the email you want to check the headers for.
- Next to Reply , click the Down arrow .
- Click Show original.
- Copy the text on the page.
- Open the Message header tool.
- In “Paste email header here,” paste your header.
- Click Analyze the header above.
There are two last steps: Write down your findings, or copy and paste them into a file. Then call us at the OLA Consumer Hotline at 1-866-299-7585 to report the information. We’ll include it in our regular reports to Google’s Investigations and User Protection Division.
Get Credit Counseling Help
If you find yourself in a situation where you cannot afford your loan payments, get help. There are several organizations that can help you with your credit concerns. The U.S. Department of Justice lists approved credit counseling services by state and judicial district.
Know who to contact if you think you’re being harassed by illegitimate debt collectors
Recently, the Federal Trade Commission shut down a company that was calling consumers and threatening them over debt that had already been paid back. If you think that you’re being harassed by debt collectors over money that you don’t owe, immediately contact the Federal Trade Commission to report the company, report it to the OLA Consumer Hotline at 1-866-299-7585.