Privacy & Security

Know the Risks of Online Cash Advances

It can be risky to use the Internet to obtain a cash advance. The fees associated with cash advances are expensive and the length of time you have to repay a cash advance if often short. In addition, when you obtain a cash advance online, you have to deal with privacy and security concerns. Instead of signing a paper contract, you will sign the contract electronically, often by just clicking the "OK" button. Also, the disclosures the lending company is required to give you will be sent electronically instead of on paper. Finally, you should be aware that the fees associated with online cash advances are often higher than they are when you obtain a cash advance from a brick and mortar company.

It is important to notice whether or not the website where you are applying for a cash advance is a secure site because you could be putting your privacy and security at risk if it is not a secure website. Anytime you apply for a cash advance online you will be required to send personal information such as your social security number and other personally identifiable information so it is imperative that you are dealing with a secure site.

Any time you apply for a cash advance online you are giving permission to the cash advance company to access your bank account. This is required in order for the company to electronically deposit your cash advance so there is no way to get around this. They will also be able to withdraw any fees associated with the cash advance and they will withdraw the payment when it comes due. You could be at a serious risk for fraud or identity theft by disclosing your personal information to companies that you don't know.

Online cash advances can, in effect, present a real trap to borrowers. It is important to pay close attention to the terms of your cash advance because if it is the kind that automatically renews every payday, your cash advance company can electronically withdraw the finance charges associated with the cash advance and you wouldn't have paid any principal toward the cash advance; just interest. It is also important to completely follow through when you are ready to pay off the cash advance as you may need to ensure that the cash advance company closes the cash advance in the correct manner.

It could prove difficult to physically locate the lenders that provide cash advances. In fact, some of the Internet cash advance companies actually operate offshore; others simply provide so little information that neither the borrower or a consumer advocacy agency can physically locate them. In this way, the cash advance companies are able to abide by laws in foreign countries or in states that have little, if any, consumer protection in place. The way that it is supposed to work is that by law, cash advance companies are supposed to abide by the laws of the state in which the borrower obtains the loan but it doesn't always work this way and it has been difficult for states to enforce laws against online cash advance companies.

Keep this in mind in case you need to lodge a complaint against an online cash advance company. If you do have a complaint you should file it with the Attorney General in your state, the state regulatory agency, and the Federal Trade Commission. Regardless of where the cash advance company is located, they are required to abide by the laws of your state.