Cash Advance America, which is also known as Advance America, is a business that provides different types of loans, such as payday loans, installment loans, lines of credit, and title loans. But Advance America is a controversial company with questionable business practices, even though it has been around for more than 20 years and has served millions of customers. So, is Cash Advance America a real company that you can trust to lend you money? Let’s find out.
The Legitimacy Debate
To begin with, Advance America is a real company that serves customers all over the US with real financial services. It has more than 1,200 physical locations in almost 30 states and also lets people apply online. That being said, Cash Advance America is a real business.
However, many consumer advocates argue that just because a company is legal doesn’t mean it’s necessarily ethical or looking out for the best interests of its customers. Advance America has come under scrutiny for its extremely high interest rates and fees hovering around 300-500% APR in some cases.
While these rates are legal (though regulated differently in each state), they are considered predatory by many financial experts. Customers can easily get stuck in cycles of debt and repayment that ultimately cost far more than their original loans.
Warning Signs and Red Flags
Beyond concerns about high costs, there are other warning signs that customers should be aware of when considering Advance America:
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Aggressive collections tactics: Customers have reported receiving frequent, harassing calls regarding debts, even after they have repaid loans or canceled services.
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Names that sound alike: Cash Advance America is sometimes mixed up with other businesses with names like Cash America or Cash Advance USA, which causes confusion among customers.
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Third-party lender: Advance America does not actually lend money directly but connects borrowers with third-party lenders, adding a layer between customers and their loan providers.
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Regulatory actions: Because of how it lends and collects debts, Advance America has been sued and punished in several states.
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Scam connections: Scammers have been known to falsely claim affiliation with Advance America or other similar names to defraud customers.
Official Warnings about Potential Scams
In fact, the Washington State Department of Financial Institutions has officially warned consumers about scams and misleading practices related to Cash Advance America. According to their alert:
- Victims have received calls offering loans in exchange for upfront fees, but the loans never materialized.
- Some consumers were told to purchase gift cards and send the code to the scammer to receive loans, which also never happened.
- Scammers aggressively attempted to collect on nonexistent debts, using threats and intimidation.
- Misleading emails and letters used legal or government sounding names to demand repayment.
Overall, authorities received many complaints about harassment, fraud, and predatory actions associated with Cash Advance America. While it’s unclear if Advance America was directly involved or aware, the company’s name was frequently invoked.
Alternatives to Cash Advance America
So while Advance America isn’t an outright scam, customers may want to consider alternative options for short-term loans including:
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Local credit unions and community banks, which may offer small personal loans with lower rates.
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Employer cash advance programs through companies like PayActiv, Earnin, and Dave.
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Peer-to-peer lending networks like LendingClub and Prosper, which connect individual investors and borrowers.
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Credit-builder loans designed to help establish or rebuild credit scores over time.
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Payday alternative loans from organizations like Goodwill, which are subject to rate caps.
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Borrowing from family or friends or using a low-rate credit card if possible.
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Debt management plans through non-profit credit counseling agencies.
The Bottom Line
Cash Advance America is a legitimate company in the sense that it is a registered, regulated business providing real financial services and products. However, its extremely high fees and concerning practices lead many experts to view Advance America as a predatory lender that takes advantage of low-income customers in need of cash. Customers should be aware of red flags like aggressive collections, regulatory issues, and scam connections before doing business with Advance America or similar companies. For safer, more affordable options, reputable local lenders, credit unions, and non-profit agencies are better alternatives to avoid the risks and traps of payday lending.
A cash advance scam — aka, an advance fee scam — asks for money upfront in order to get a loan or receive some other benefit.
If you apply for a loan or a job, or you have been told you have won a prize, but the company requires you to pay a fee upfront to receive the benefit promised, stop dealing with them immediately. Its a scam in progress. Think about it: If you need money for a loan, you dont have money to pay the fee.
Good, legitimate lenders know this. So they wont require any fees on your loan until after they have given it to you. The same concept applies to work from home or prize scams – why should you have to pay in order to work for someone else, or pay to receive a prize? And did you even really apply to get the job or win the prize?.
Loan scammers often say things like “No credit check needed!” or “Bad credit OK!” to get people to fall for their schemes. This is a big red flag that the lender is not who they say they are. Proceed with much caution.
Most lenders will want to look into your credit before issuing a loan — even if they specialize in customers with no or poor credit histories.
If you get a loan offer on the phone, its a scam. Hang up the phone. And never give personal information over the phone. Honest lenders dont make phone solicitations.
Scammers will often name their “company” something very similar to a well-known company. Theyre trying to trick and confuse their victims. They want you to think youre dealing with a reputable business. Pay close attention to their name and contact information and make sure it really matches online info of the reputable business you think you are dealing with. Do some research before proceeding.
Cash advance lenders have to register a license with the Texas Secretary of State. Ask for proof of their license. If they dont have one or wont show it to you, walk away immediately.
More than 3000 in Florida getting checks from Advance America
FAQ
Is Advance America a legit cash advance?
Doesn’t have to be big. It’s true that Advance Cash America is a payday lender, and they buy small debts that other lenders just send to collections. You may have received a notice about an overdue payment, you may not. Some companies go straight to a collection service.
Are Cash Advance and Advance America the same company?
No, “Cash Advance” and “Advance America” are not the same company, but they are related. Advance America is a specific company that offers various financial services, including cash advances.
How do I know if I’m being scammed by a loan company?
9 red flags of loan scams to watch out forThe lender says approval is guaranteed. The lender charges upfront fees. The lender pressures you to apply now. The lender contacts you first. The lender’s terms are unusually favorable. The lender has no contact information. The lender has no physical address.
Can Advance America take you to court?
You may have heard that payday advance lenders can take you to court if you do not repay. And unfortunately, it’s true. A lender can take you to court and garnish your wages.