Online Payday Loans – Beware The Scams

Online payday loans are a quick, convenient and (usually) hassle free way to borrow some emergency funds but that doesn’t mean you should go jumping from one online application form to the next without doing a little due diligence.

At the time of writing the top 3 results in Google uk for the search term ‘payday loans‘ are all registered to individuals rather than to government registered and approved loan companies.

The #1 result – paydayloans.org.uk – is registered to a Czech woman living in Prague while result numbers 2 and 3 – dcloans.co.uk and nadineloans.co.uk – are both registered to a UK individual living in Bournemouth. All 3 are dubious at best and at worse, probably breaking a few trading laws.

Lets take a look at why you should never enter such personal details as your bank account number and date of birth into an online loan application form without first checking out whether the web site asking for the info is both legitimate and safe.

PaydayLoans.org.uk

At first glance this looks a professional, genuine payday lender but a closer inspection raises several alarm bells. At the bottom of each page there are 4 images designed to give subliminal social proof that the business is genuine.

The ‘as seen on channel 4′ image is fake and links to a debt site, as does the water charity image. The ‘proud supporters of Kiva’ image does link to Kiva but there is no mention of PaydayLoans.org.uk in Kiva’s list of partners.

The image that rings the alarm bell the loudest though is the security image from Comodo which you are granted permission to display on your web site when you purchase a security certificate from Comodo which protects personal information that is submitted via online forms on your web site – Its a fake.

The site has no security certificate, if it did you would be able to view the site using https:// instead of just http://

Other things to worry about are the lack of a postal address, no phone number, no Consumer Credit License number on display and no company registration details but then why would there be when the site is owned by a girl living in a block of flats somewhere in Prague?

At best and the most likely outcome is that your information is being sold to 3rd party companies and you can look forward to being bombarded with phone calls and junk mail for debt recovery programs, at worst you are risking id theft.

dcLoans.co.uk and NadineLoans.co.uk

Both owned by the same individual and again it looks like these also sell on your details to a 3rd party.

Apart from the bad spelling showing a lack of professionalism, other reasons not to apply for online payday loans from web sites like these two include:

• No address or phone number
• No about us page
• No business license numbers
• No credit license
• No contact form

NadineLoans.co.uk does have an ‘about us’ page but it has nothing about them as a business entity apart from it states:

“All the information you submit is secure. We are professional financial advisers working in the UK and USA so you can rest assured that we will do our best to provide you the best and cheapest loan.”

It doesn’t have a security certificate so information you submit to their web site is NOT secure and the site is registered to an individual rather than a company so I very much doubt they are financial advisers either.

Neither the NadineLoans.co.uk or dcLoans.co.uk web site is displaying a representative APR percentage which is illegal.

The online payday loans industry is plagued by web sites like those mentioned above and its one of the main reasons genuine payday lenders come under fire from MP’s like Stella Creasy.

Usually it is simply a case of someone selling on your details to actual lenders but a worse case scenario could see your bank account emptied come payday or you become a victim of identity theft and your details are used to rack up other lines of credit.

How To Protect Yourself When Applying For Online Payday Loans

Because the above sites aren’t the actual lender they don’t need a Consumer Credit License so they don’t have to stick to the rules. Hence the bold statements like ’96% approval rate’ and ‘no credit checks’ but these are only designed to convince you to fill in the forms with your details and they simply are not true. The lenders they pass your details to will do a credit check and industry average approval rate for payday loans is around 10%.

The old saying that if it sounds too good it probably is definitely holds true here.

Make sure any online payday lender you are considering applying to is showing their Consumer Credit Licence on the web site and if you have never heard of them you can check the consumer credit register here to make sure the license is genuine or hasn’t been revoked due to consumer complaints.

As well as their consumer credit license most genuine lenders will also list their company registration number, postal address and even data protection act number in plain view. Check the bottom of the home page or the about us page.

Many of the genuine payday lenders such as Quick Quid are members of the Consumer Finance Association which means they have agreed to abide by a code of conduct designed to protect the consumer. For example, making sure an applicant can comfortably settle the debt without hardship.

When on an application page – the page where you enter your details – the url in your address bar should always be https rather than just http. The https means your details are encrypted and cannot be seen or stolen by anyone.

Stick with the payday lenders who advertise on TV because these will all be genuine licensed lenders. See our payday lender comparison chart for a selection of genuine online payday loans on offer.