WKYT Scam Week | Online payday loans look legit, but could be laundering money

(KNOE)
Published: Jul. 22, 2016 at 4:03 PM EDT
Email This Link
Share on Pinterest
Share on LinkedIn

Jamie Akers with Commonwealth Credit Union told WKYT's Miranda Combs online payday loan sites are enticing to many, because people can get their money quick. "They get it online because they can get the money in a 30-minute period," she said.

The credit union has a training area, used mainly to teach staff how to handle scams. Akers said it's their goal to stay a step ahead of money thieves. "We've had many instances of this happening. And we're talking not little dollar amounts, $10,000, $20,000!" She said the online payday loan sites are fast, but many times, they are a fake. "It may say a reputable name of a financial institution, but it's really a scam."

Akers said it typically works like this: The payday loan site will ask you to fill out some paperwork, and give your social security number. They then get back to you within 20 or 30 minutes and tell you you've been approved. Then, they ask you for your banking information. Akers said, people give it. "So when they give it, your whole account is wide open."

And then, she said, they add another enticing twist to the scam. "They'll send back an email and say, 'Oh, would you like to make your credit score better?' And of course, what are you going to say? Sure, if I've got a bad credit score, I want it raised." She said, "Payday lenders who are scammers love mobile banking, where you capture a check with your phone and they immediately have access to your account."

"It's all money laundering is what it is," Akers explained.