Cash advance loans aren’t necessarily scams, but they can be risky due to high fees and interest rates. Here’s what you should watch out for:

Legitimate Cash Advance Loans

• Bank or Credit Card Cash Advances: Many banks and credit card companies offer cash advances, but they often come with high fees and interest rates.
• Employer-Based Advances: Some companies allow employees to access their earned wages early through legitimate programs.
• Apps Like Earnin & Dave: These apps allow small cash advances with low or no fees but may require tipping.

Red Flags & Scams

• Upfront Fees: If a lender requires a fee before giving you a loan, it’s likely a scam.
• No Credit Check for Large Amounts: Most legitimate lenders check your credit. If a lender offers a large sum without verification, be cautious.
• Aggressive Tactics: Scammers pressure you to act fast and may use threats.
• Unclear Terms: Hidden fees, extremely high APRs (sometimes over 300%), and deceptive repayment schedules are common with predatory lenders.
• Unlicensed Lenders: Always check if a lender is registered in your state.

Better Alternatives

• Credit Union Loans: Many offer small, low-interest emergency loans.
• Local Assistance Programs: Some nonprofits and community groups provide financial help.
• Negotiating with Creditors: Some companies allow you to defer payments or work out a lower plan.

If you need quick cash, research lenders thoroughly, read reviews, and avoid any loan that seems too good to be true! Several lenders have been identified for engaging in predatory or deceptive practices. Here are some notable examples:

Yellowstone Capital

In January 2025, New York Attorney General Letitia James secured a $1.065 billion judgment against Yellowstone Capital, also known as Delta Bridge Funding or Cloudfund. The company misled small businesses by disguising high-interest loans as merchant cash advances, leading to effective interest rates up to 820%, far exceeding New York’s usury limit of 16%. This settlement provided over $534.5 million in debt relief to more than 18,000 small businesses nationwide. (Reuters)

Dave Inc.

In November 2024, the Federal Trade Commission (FTC) filed a lawsuit against the financial technology company Dave Inc., alleging deceptive practices. The FTC accused Dave of misleading users with advertisements for cash advances up to $500, which most users did not receive. Additionally, the company allegedly charged undisclosed fees and collected nearly unavoidable “tips” on transactions, falsely claiming the money was used to buy meals for needy children. (Reuters)

Scott Tucker and AMG Services

Scott Tucker, through his company AMG Services, operated a payday loan scheme that charged borrowers undisclosed and inflated fees, with interest rates as high as 700% per year. In 2017, Tucker was convicted on 14 counts, including making illegal payday loans and racketeering. He was sentenced to over 16 years in prison, and the Federal Trade Commission obtained a $1.3 billion civil court judgment against him. (Wikipedia)

Wonga.com

Wonga.com was a British payday loan firm criticized for its exorbitant interest rates, equating to an annual percentage rate (APR) of 1,509%. The company faced scrutiny for lending money to individuals unable to repay and for unfair debt collection practices. Despite attempts to reform, Wonga entered administration in 2018 due to financial difficulties and a surge of customer compensation claims. (Wikipedia)

Advance.Cash

Advance.Cash has received multiple complaints filed with the Better Business Bureau (BBB). Customers have reported issues such as exorbitant interest rates, with one individual noting an APR exceeding 600%. Others have expressed dissatisfaction with customer service and difficulties in resolving disputes. (Better Business Bureau)

It’s crucial to thoroughly research and understand the terms before engaging with any lender. Be cautious of high interest rates, hidden fees, and aggressive collection practices. If you believe you’ve been a victim of predatory lending, consider filing a complaint with the Consumer Financial Protection Bureau. (Consumer Financial Protection Bureau)

If you’re considering a cash advance loan or dealing with debt, exploring alternatives like credit counseling, negotiating payment plans, or looking into lower-interest loan options may be a better approach.

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