Scammers advertising loans with advance fees seek out people who are in great need of money. They promote their products and services in local print materials and legit looking websites online. They entice people to grab their offer by using words like “guaranteed” and phrases such as “easy credit.”

Oftentimes, websites offering advance fee loans asks their applicants to fill out an application form that requires personal information such as social security and bank account numbers. Then, the applicants are victimized when they are informed that their loan is approved but need to pay an advance fee amounting to several thousands of dollars before they get it. After they make the payment, they never get the loan they were promised or they are even asked to pay more.

In order to avoid these scammers, the Better Business Bureau warns individuals seeking for loans to be wary of the following lenders:

1. Lenders who request upfront fees. Fees may be required by a lender but not prior to completing the loan application. Be cautious once you are asked to send money through wire transfer or money order.

2. Lenders who do not give their contact information. You must always ask for a physical address of their office and their phone numbers. If they cannot provide you with any of these, it may be a sign that they are trying to avoid law enforcement.

3. Lenders who commit to provide a loan despite of the applicant’s credit history. Lenders operating legally will usually not guarantee approval before application most especially if the applicant has poor credit rating.

4. Lenders that do not operate within the U.S. Most of these lenders use fake U.S addresses or P.O boxes.

5. Lenders who pressure their applicants to take immediate action. Scamming lenders will ask you to rush in making a payment to them and sending your information before serving any paperwork. Make sure to check the company’s background before providing any information. As much as possible obtain a written contract of your loan.

6. Lenders who use names that sounds like other legit companies. They do this to confuse you and tempt you to obtain their products and services.

It is tempting to obtain advance fee loans especially when you are in need of money. However, be cautious and think about it deeply. You can check with the attorney general’s office to find out if the lenders are registered. You may also check if they are legal through the BBB.

http://youtu.be/40p2BnhFqiM

Lawmakers are passing a bill as a second attempt to control the industry of payday lending. During the previous year, lobbyists and politics had a big role in creating legislations for the purpose of regulating an industry that is said to take advantage of vulnerable residents.

The sponsored act of Rep. Gordon Hintz, D Oshkosh entitled Predatory Lending Consumer Protection Act blocks auto title loans and sets limits to the loan amount. Specifically, the maximum amount must be at 35% of the gross monthly income. However, this act did not put the same cap of 36% to interest rates.
Spending huge amounts, lobbying lawmakers and contributing to campaigns were all done by the payday lending industry to fight the bill.

At present, two Republicans namely Rep. Evan Wynn, R-Whitewater, and Sen. Glenn Grothman, R-West Bend, are submitting a proposal to the legislature for a 36% limit to payday loan interest rates.
This new bill is also co-sponsored by Hintz. It was Wynn who sought information from Hintz and banking industries to work on the proposal. Wynn praised the work of Hintz and his colleagues in the previous session and blamed lobbyists for the failure of the interest rate cap proposal.

A Payday loan is a small amount, high interest loan with a short payment period. Typically, a payday loan is paid on the next paycheck of the borrower. The usual charge amounts to $20 for every $100 of loan. However, when the borrower fails to pay during the specified period, the debt is rolled over and the interest charges pile up.

The payday lending industry began in Wisconsin in 1995. Back then, interest rates were at 18 percent maximum. Eventually, 17 payday lenders emerged in the state. At present, there are about 550 of them.
According to Hintz, it is expected that the payday loan industry is preparing to prevent the bill on interest rate cap from becoming a law.

Related articles

• Payday Lending’s Final Days? Not by a Long Shot, Reports AboutPaydayLoan.com (prnewswire.com)
• Payday Loan Lenders Under Fire (nowpublic.com)
• Should interest rates be capped? (cleardebt.co.uk)

Rob McCord, Pennsylvania State Treasurer is continuously admiring a payday loan program of a credit union. This program has been reported to save its members worth $15 million.

The $125 million Cross Valley Federal Credit Union was visited by Rob McCord to find out about its Credit Union Better Choice program. According to the Treasury Department of Pennsylvania, this program was said to have given assistance to three women who were faced with unexpected expenses. This Wilkes-Barre, Pa.- based credit union has been reported to have issued around 280 Better Choice payday loans to about 101 of its members since the year 2007.

Better Choice Payday loan was launched in 2006 through a joint venture between Pennsylvania Credit Union Association and the state. Since then, the participating credit unions was said to have made about 43,000 Better Choice loans that amounted to a total of $20.5 million.

Officials said that the loans have given its members a total savings that amounted to $15 million. This cost includes fees especially interest charges that goes with most payday lending products. Better Choice Payday Loan is available at about 79 credit unions in almost 222 Pennsylvania locations.

Mc Cord said that the Better Choice Program is especially designed for people who seek payday lenders because of economic struggles that lead to difficulties in making ends meet. He adds that this program is a better option for these people.

The President and Chief Executive officer of Cross Valley FCU, Edward Kaushas, said that the decision to offer the loan came easily. Their company is happy to know that the program is able to reach out to many people and make a big impact in their lives and in their families.

The typical charge for a $500 payday loan is about $15 for every $100 that is borrowed in a two week period. For a 90-day period, the fees for the same loan will reach about $450. However, in the Better Choice program, the cost of this type of loan for a 90 day period is about $42.50. By the end of the loan period, the borrowers save about $50.

Mc Cord highly spoke about the Better Choice payday loan program. He said that this helps Pennsylvanians expand their dollars for emergency needs without falling into bad debt that most traditional lenders may create.

Related articles

• Payday Loans Exposed: How ‘Short-Term’ Lenders Create Long-Term Troubles (dailyfinance.com)
• Scammers Accused of Swindling Payday Loan Applicants (walletpop.com)

Borrowers in debt look for other options as other lenders support the end of payday loan rate restrictions in assembly. Consumers in Kentucky want to open all their options in the decisions they make. This includes choosing the best financial product that will fit them and their circumstances.

In the General Assembly’s recent session, self-appointed activists removed the option of payday loans for consumers by pushing a bill to remove payday lenders from the state. Luckily, there are many bipartisan free-market advocates that can overpower this consumer rights violation. However, the activists plan to come back and submit the same bill in the coming year.

Efforts given to put an annual limit to payday loan percentage rates are caused by the lack of understanding of the product. This is also pursued by organizations that are funded by payday loan competitors.

Payday loans are one-time payment, fee-based loans. The law of Kentucky particularly forbids the charging of interest by payday lenders. Its opponents describe it untruthfully to give legislators and the public the impression that payday loan borrowers are charged high interest rates, late fees, rollover charges and other forms of charges that are prohibited in Kentucky. But the truth is that payday lenders inform their customers of the real terms of their loan. Once they obtain a loan, the customers know how much they owe by the time the payment period ends.

Payday lending opponents in the state of Kentucky includes CLOUT, KCRL and AARP. All three are competitors of payday lenders. CLOUT and KCRL are mostly funded by banks and credit unions that compete with payday lenders in the short-term credit market.

A payday loan may not be the best alternative to obtain emergency money. But, it can still be the least costly option for some consumers for many families. Hence, the choice must be left for consumers to make and not for legislature or activists.

Related articles

• State orders payday lender to halt program (seattletimes.nwsource.com)

A new company joining the cash advance industry is Payday Loan Buff. This company is providing payday loans to consumers who can apply for loan online by only showing a proof of income. The company announced lately that they plan to put up a base that will operate in South America. A licensing agreement is being set so that Payday Loan Buff can start an office to operate in Northern Mexico.

According to their CEO, part of the company’s plan for expansion is to start with some countries in South America. He further added that the company is lucky to find a partner that allows them to get a license to operate in the whole country of Mexico. This is a way to gain access to many consumers that have been experiencing tremendous financial challenges. The easy way to obtain cash advances is the company’s goal to help their consumers improve their lives little by little.

Payday Loan Buff’s partnership with Mexicans will be directed by a number of local businessmen and businesswomen. These entrepreneurs personally approached the company after seeing a press release of the company’s intention to operate in their region. This group of entrepreneurs is more aware of the potential consumers in their area. Because of this, they can represent the company in the best way possible. Also, they can keep local customs economics in the frontline.

The plans of the company include website development and training for the Mexican team. Aside from this, the company aims to oversee management. This is to ensure that the policies that have been set by the company are being practiced in the new site. Ownership of the operations will still be given to the company but license of the operations will be placed in the hands of the group of entrepreneurs. The group of businessman and businesswoman will take the daily responsibility of handling the operations.

Related articles

• Payday Lender Announces Guarantor Lending (prweb.com)
• Predatory Payday Lenders Put Military Families in the Crosshairs (dailyfinance.com)