Archive for the ‘PAYDAY LOANS’ category

Internet Payday Lenders vs Store Front Lenders

April 3, 2010

Did you know that most Internet payday lenders aren’t even licensed to lend in most states?  It’s true! I’ll get back to the facts later in this article but first I want to address a few issues about payday loans, in general.

High cost payday lending is authorized by state laws or regulations in 35 states. Fifteen states and the District of Columbia protect their borrowers with reasonable small loan rate caps. The Arkansas Supreme Court ruled that the Arkansas payday loan law was unconstitutional.  In recent years, Oregon, Ohio, New Hampshire and the District of Columbia have reimposed rate caps, however,  this didn’t stop them from charging outrageous interest rates! Store front lenders continued doing business by concealing their services  behind a loophole! The services they offer are the same but their businesses are now called, Credit Service Organizations! CSO’s are NOT regulated, they are only required to register with the secretary of state! Now that’s what I call a whopper of a loophole!

Many Internet payday loans are structured to automatically renew every payday, with the finance charge electronically withdrawn from the borrower’s bank account, another loophole! Finance charges are in the $25
(650% APR) to $30 (780% APR) per $100 borrowed range, with built in loan flipping in many contracts. When you obtain a payday loan on the Internet you are compromising your safety in so many ways!  Usually lenders are hard to locate, identify or contact. Some are licensed in their home states, while others hide behind anonymous domain registrations or are located outside the United States. Banks are involved in Internet payday loans through the Automated Clearing House System (ACH) used to electronically deliver loans to consumers’ bank accounts and to withdraw
payments. County Bank of Rehoboth Beach, DE, participates directly in Internet payday lending. Internet payday lenders bypass state usury laws and consumer protections by locating in lax regulatory states and making loans without complying with licensing requirements or state protections in the borrower’s home state. This has become more and more common!

I would never recommend a payday loan under ANY circumstances, BUT, if you have absolutely no other choice, please do not choose the Internet to obtain a loan. The safest way to obtain a loan is going to a store front lender who is a member of the CFSA Community Financial Services Association of America).

What Payday Lenders DON’T Want You To Know

March 30, 2010

Payday lenders often establish their own “in house” collections department. Once you have defaulted on a payday loan you will begin receiving calls from a representative who claims they are someone important (insert intimidating title) from “collections”, leading you to believe it’s an outside collection agency who is doing you a favor by informing you they have some type of legal papers (pending of course) if you don’t pay up NOW!

They’re always cranky and brash using terminology that sounds legal and urgent!  Usually they speak the words quickly to dissuade you from recognizing the BIG words they’re using to sound scary and legal!

The fact of the matter is,  most payday lender employees are uneducated and have absolutely no idea what they are talking about, all they know is IF they collect- a percentage of it will be on their next paycheck in the form of a bonus!

Here are a few tips on how to handle those fast talking collectors who think they are doing a service for their employer:

  1. Ask them their name (make them spell it), employee ID number and a phone number to their direct line (in case you accidentally get disconnected lol).
  2. Ask where the office is located of which they are calling (address).
  3. Ask their supervisor’s name (again, make them spell it).
  4. Ask how long they have been employed by this company.

If they have agreed to answer the questions above (I rather doubt it, but it catches them off guard and collectors are fun to play with lol), keep asking as many questions that will come to your mind, or hang up!

The point is, using this method usually bewilders an in house collector who’s soul purpose was to scare the pants off of you. On the other hand, if they volunteer the information you will then have contact information to make payment arrangements!

WELCOME!

March 29, 2010

Welcome to Payday-Loan-FREE Advocates!
I hope to be able to provide helpful information to those who have been caught up in the vicious cycle of store front & Internet Payday lenders.
It all started for me when I became a single female with little or no resources, fortunately, I found a website called