Payday-Loan 'Processing Fee' Scam
A quick-cash lender approves you instantly but requires a 'processing' or 'verification' fee first — you pay and receive no loan.
Think a message like this reached you? You can check it right now.
What this scam is
Marketed to people needing fast money, this scam approves a small payday-style loan instantly, then requires an upfront processing, verification, or 'good faith' fee, often by gift card or prepaid card. After you pay, the loan never funds and more fees may follow. Legitimate payday lenders deduct fees from the loan or your repayment; they do not require you to pay before funding via gift cards.
What it usually looks like
- Instant approval for quick cash.
- A processing or verification fee required first.
- Payment by gift card or prepaid card.
- A lender you cannot verify.
Common warning signs
- Paying a fee before receiving a loan.
- Gift-card or prepaid-card fee demands.
- Instant approval regardless of credit.
- Pressure to pay immediately.
Example wording scammers use
“You're approved for $800 instantly — pay the $75 processing fee to release your funds.”
“Verify your account with a $50 prepaid card and your cash is on the way.”
These are illustrative examples written by ScamSplain, not real messages.
What the scammers want
- An upfront fee for a loan that won't fund.
- Untraceable payment.
- Repeat fees.
What to do
- Never pay a fee before receiving a loan.
- Verify lender licensing with your state.
- Avoid gift-card 'fees' for any loan.
- Report the lender.
What to do if you already responded
- Contact the gift-card/prepaid provider immediately.
- Keep records.
- Report at reportfraud.ftc.gov.