Online Payday Loans Overrun with Abusive and Deceitful Practices
The Pew Charitable Trusts revealed on October 2nd that today’s online payday loans are overrun with abusive and deceitful practices.
In their latest entry to the Payday Lending in America series, Pew observed that online and Internet loans are more costly when compared to the loans offered by storefronts. Additionally, most online borrowers admit to being threatened by debt collectors, while a significant number of payday loan complaints are connected to loans taken over the Internet.
The study revealed that nine out of ten payday loan complaints made to the BBB are against online lenders. Pew also found that one-third of all online borrowers have loans that are structured to renew automatically.
Likewise, a large sum of online payday loans have led to unauthorized withdrawals (and overdrafts) on checking accounts, threats against borrowers, and the illegal disclosure of personal info – all actions that violate basic consumer rights under federal law.
According to Pew’s study, the typical APR for lump-sum online payday loans is 650%, and nearly one-third of online payday loan borrowers report that they’ve been threatened by a debt collector or lender.
Digital Journal notes that Pew’s report is “the first formal analysis to use surveys and focus groups, consumer complaints, company filings, and lenders’ spending on advertising and prospective-borrower leads.”
In their report, Pew asserts that the Consumer Financial Protection Bureau (CFPB) needs to establish guidelines that are clear, yet powerful, in order to make the small-dollar loan market – including online payday loans – safer for consumers everywhere.
Whether your loan is through a storefront or an online lender, the FDCPA (Fair Debt Collection Practices Act) still requires lenders and debt collectors to follow specific guidelines when collecting debt. Under federal law, debt collectors are forbidden from threatening, harassing, repeatedly calling, or falsifying information when contacting consumers regarding any debt they may owe.
If you’re the victim of repeated or harassing phone calls from debt collectors or other callers, you are within your rights to pursue legal action and seek compensation. Meeting with one of our consumer law attorneys will cost you nothing. Take the first step toward stopping debt collection calls and email our offices today.
