Payday loan pretender comes clean
You can always count on the Problem Solvers to warn you about different scams, but this time you're hearing it from one of the scammers.
He says he felt guilty after seeing news reports of people losing all their money to the kind of pay day loan scams he was running from India. He agreed to a Skype interview with our sister station in upstate New York.
Scammers are working the phones right now. Their only goal is to trick you out of as much money as possible. A self-proclaimed "former scammer" says that's what he did all the way from Ahmedabad, India. We'll call him Nadir.
"I just feel that it's wrong. I don't want to do this,", Nadir said, explaining his reason for agreeing to the interview.
He asked that his true identity be protected saying he fears for his safety.
According to Nadir, the scam starts with consumers in America who go online looking for money. A simple search with the key words "pay day loans" produces a number of websites that promise to connect you with a lender. The sites are lead generators. The people running the websites collect and sell all the personal information you provide -- in some cases to anyone who'll pay.
Nadir says he and the people he worked for paid about 20 cents per lead without having to provide any proof that they were a legitimate loan business.
"Nothing. Nothing," said Nadir. "They just need money to their account. Once it's there, they will forward me the leads. That's it."
Once the scammers get information about people who need loans, they pounce. First, a phone call offering the consumer money, then an explanation of their options.
"They said I could have anything from $2,000 to $10,000 and I said $6,000," one unsuspecting victim told our Sinclair sister station in Albany, New York.
But before you can get the loan you have to prove you can pay back the money. The scammers instruct you to buy a pre-loaded debit card and give them the number on the back. Nadir acknowledges the goal of the scam is to repeat the debit card routine as often as they can, with no intention of ever giving you a loan.
"Yes, once they have given us the money and the money is out of the card, we will give excuses that, 'Now your credit score is low, just get another Green Dot card for $200 and it will be solved.' Once they get it, another problem will be created, and it will go on," he said.
The scammers use your personal information to hack your bank account and steal your identity. Remember, the information they purchase from the website lead generators includes names, addresses, phone numbers, social security numbers, bank account numbers, routing numbers, email addresses and even IP addresses.
While Nadir insists he has stopped scamming people, hundreds of others are still carrying out the scam from 7 thousand miles away. And they're raking in millions of dollars. According to Nadir, he was bringing in $20,000 - $30,000 a month for his bosses- for that one operation alone.
Bottom line: Stay away from all loan offers online, unless they're with an established, reputable bank or lending institution that is licensed with the Washington State Department of Financial Institutions. And never, ever deal with anyone who wants you to send money or debit card information as a condition of getting anything.