August 26, 2009
The Washington State Department of Financial Institutions is warning consumers to verify the license of any lending professional they are considering doing business with to avoid becoming victims of potential illegal payday loan scams.
TipTopCash.net appears to be an internet lead generator for internet payday loan companies who are providing loans in excess of the $700 limit allowed by Washington law. TipTopCash.net had placed radio advertisements on stations advertising in Washington in an effort to solicit business.
TipTopCash.net solicits leads using a Web site, www.tiptopcash.net.
Neither the Washington State Department of Revenue nor the Office of the Secretary of State shows that TipTopCash.net is authorized to do business in Washington. The company is not licensed by the Department of Financial Institutions. TipTopCash.net does not appear to have any physical presence in Washington State. .
How The Potential Scam Works
- “TipTopCash.net” advertises payday loans of up to $1500
- Consumers who apply online are asked to provide their personal information
- Upon providing their information, consumers are told they have been pre-approved to receive a payday loan and they will be connected with a lender
- It appears that once the personal information is provided, the lender conducts a credit check which is not clear disclosed on the Web site
- It appears the terms of the loan are not made clear to the consumer until after a credit check has been conducted
Things To Watch For
- Any loan in excess of $700 (including all other loans a consumer may have outstanding with any other lender) is against the law in Washington
- There is a maximum fee a lender may charge of 15% of the first $500 borrowed and 10% of anything above $500. For example if a consumer borrows $700, the lender may only charge a fee of .15 x $500 or $75, and .10 x $200 or $20, for a total fee of $95 ($75 + $20)
- A lender must disclose the terms of the loan to you and must provide you with copies of any loan documents
- Most internet payday loan companies require you to provide them access to your bank account so they may access funds if you do not pay. This allows them unfettered access to your account
- Most unlicensed internet payday lenders are difficult to locate and communicate with regarding complaints
- Before taking any loan from a payday lender, check to see if they are properly licensed with the Department of Financial Institutions at www.dfi.wa.gov or call (360) 902-8700 or toll free at 1-877-RING DFI (746-4334)
Any payday loan obtained from a lender not licensed with the DFI, and not repaid to the lender may not be collected by lender and the lender may not pursue action in Washington State to collect the debt. See RCW 31.45.105
If You Feel You're A Victim
If you feel you have been a victim of an unlicensed or illegal payday loan, please contact the Department of Financial Institutions at www.dfi.wa.gov or call 360 902-8700 or toll free at 1-877-RING DFI (746-4334).