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Tips for consumers considering online loans

Lending Trap: Cash at a Cost seriesThe Minnesota attorney general recently offered this advice to consumers considering online loans:

  • Never do business with an Internet payday lender that is not licensed to operate in Minnesota. To find out if a lender is licensed, check the Minnesota Department of Commerce website at  or call (651) 296-4026.

  • Check the effective interest rate and whether it complies with caps set in state law.

  • Do not provide your personal and banking information to an online lender unless you are confident in whom you are dealing. Many consumers report being targeted by international criminal fraud rings after entering their personal information into the website of an online lender.

  • Hang up the phone if you are targeted by phony collection scammers threatening to arrest you or have you jailed if you do not pay back an amount you do not owe.

You can report problems with an unlicensed Internet lender to the Minnesota attorney general’s office by calling (651) 296-3353 or (800) 657-3787. Or you can download a complaint form by clicking here and mail the completed form to the Attorney General’s Office at: 1400 Bremer Tower, 445 Minnesota St., St. Paul, MN 55101-2131.

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