With payday loan stores so prevalent, the options for consumers seem endless. Today, consumer advocates are becoming more concerned with the real dangers surrounding these payday loans. High interest loans and scam loans are a growing problem that many consumers are still not fully aware of and experts claim that this risk goes beyond the normal cycle of debt associated with payday loans. Randy Hutchinson, the president of the Better Business Bureau, discussed the growing dangers of payday loans not only at the traditional walk-in stores but online as well.
According to experts, online payday loans often appear to be more convenient and discreet when in fact these have serious risks that consumers must carefully consider. A major part of the problem is that consumers do not truly know who they are giving their information to and if the said company is even genuine. Furthermore, the online company may not even be licensed to conduct business in the state you live in.
A recent report by the Howard University Center on Race and Wealth revealed that 12 million Americans in lower income areas use payday loans annually, with an approximate average of 8 payday loans a year. These loans originally cost $375 on average, yet rack up nearly $520 in interest charges.
In Florida, storefront payday loan locations were far more common in lower income neighborhoods. The report also revealed that of the 1,277 pay day loan stores operating in Florida in 2014, more than 1,000 were located in communities with annual incomes falling between $30,000 and $40,000.
Recently, a Florida based company was shut down by the Federal Trade Commission for falsely offering payday loans to customers when in reality they were stealing their money, with no intention of providing a loan of any sort.
Whether you choose to apply for a payday loan either online or at a store front location, experts urge consumers to be careful, fully understand the associated fees and risks, and thoroughly check out the company before doing business with them.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Sources: http://wreg.com/2014/10/13/avoid-online-payday-loan-scams/