Falling victim to financial scams these days is very easy. Whether the perpetrator is an identity thief, a con artist or an actual business, the affects are still the same-people’s lives are destroyed by financial headaches. Included in the list of perpetrators of financial wrongs is the payday loan industry. Many scams have abounded over the years, and it seems that with the advent of technology-the will continue to increase in frequency.

The Internet has opened up a whole new world to the payday loan industry. People no longer have to visit loan stores with documents in hand in order to receive a personal loan. They need look no further than their own computer screens for quick cash, sometimes in hours. This access to easy cash has also created scams that catch countless people a day.

As anyone who has been “phished”, or had their personal information taken online, knows-sometimes company websites aren’t what they seem. Any individual can create a professional looking website that allows a person to input their information-usually name, national identification number, date of birth and a lot of other sensitive information. By the time the borrower figures out that their information has been used for fraudulent reasons, the site has either closed down or reincarnated under a different name.

In the case of online cash advances, it’s not easy to check the history of the company you’re working with. Detecting a legitimate company can be challenging, but there are telltale signs of Internet payday scams. Companies that ask for a transaction fee up front might possibly be illegitimate. Common sense says that fees can’t be paid before a loan is approved online. Another thing to avoid with online payday loans are giving out bank account numbers. Most legitimate online companies will let the customer opt for wire transfers instead of receiving their money directly to a bank account.

Exorbitant fees aren’t exclusive only to Internet companies. Payday loan stores that are less reputable have been charged with giving out loans with up to 900% APR’s. Customers are urged, in these cases, to know exactly what percentage rates are legal in their prospective states to avoid these scams. Also, the borrower should ask what repayment terms of their loans are. If a payday loan company doesn’t allow early payoff, or stipulates that the loan must be ‘rolled over’, that would be a definite sign that the company might be part of a scam. The loan term shouldn’t be any shorter than a week, and all repayment terms should be expressed in writing, by law, according to the Fair Credit Reporting Act, or FCRA.

Scams are everywhere in the financial world in general. Most payday loan companies will maintain that they are running lawful businesses and that they contribute a valuable service to their customers. Many people who have used payday loans and consumer rights groups have said payday loan companies actually take advantage of lower-income families by charging high interest and tacking fees onto loans. Those ‘fees’ assessed are, coincidentally, not subject to usury laws that would normally prohibit such a high rate of return on a loan. Also, many loan companies are escaping the grasp of federal and state laws by taking their business online, where the jurisdiction of laws often don’t reach. To decipher between scam and real business in the payday loan industry, it boils down to buyer beware.