Online Payday Lenders
California Department of Financial Protection and Innovation Advises Caution for Payday Loan Consumers. The Department has posted an updated Internet Payday Lending Alert (PDF) for consumers who might consider using payday cash advances from online lenders. The alert is also available in Spanish (PDF). This update is in addition to two previous alerts posted by the Department which may be found here: Internet Payday Lending Alerts.
The Department warns potential borrowers to take extra caution when dealing with unlicensed Internet payday lenders who fail to obtain a license with the Department of Financial Protection and Innovation, evading state laws and regulations designed to protect consumers. The Alert provides advice and contact information to report unlicensed lenders.
What can happen if I use an unlicensed Internet payday lender?
- Lenders may collect from your bank account directly without your permission, even if you are unable to repay the loan.
- You can be charged an interest rate far higher than California law allows.
- Unlicensed Internet payday lenders may sell or pirate personal financial information even before a loan is agreed to or the borrower opts to not complete the transaction.
- Your lender may be operating out-of-state or overseas, which means if they violate the law it is hard to track them down, prosecute, and recover your lost funds.
The Department of Financial Protection and Innovation encourages consumers to check the licensing status of companies prior to transacting business. California consumers should contact the Department of Financial Protection and Innovation to check on the licensing of companies, investments or other financial services they are considering by visiting the financial services licensee listing or calling the Department’s toll-free Consumer Services Office at 1-866-275-2677.
Mortgage Loan Modification Scams
The Department of Financial Protection and Innovation, in conjunction with the Department of Real Estate, has posted a Consumer Alert (PDF) warning homeowners of mortgage loan modification and home refinancing scams, including a reminder that offers that try to collect fees in advance are illegal. Also available is this Consumer Alert in Espanol (PDF).
The following companies are Licensed to provide online escrow services:
The Department of Financial Protection and Innovation has issued the Consumer Alerts for companies offering escrow services, lending services, or are falsely advertising that they are Licensed by the Department of Financial Protection and Innovation. Please note that these companies are not Licensed by the California Department of Financial Protection and Innovation to engage in business and may be operating in violation of California law. Be sure to check out our section on Online Escrow Fraud for tips to keep yourself safe.