Predatory payday lenders hit a new low

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They will probably outdo each other again soon. Damn, as you read this you can bet the owners of a high interest, high rate loan company in eastern North Carolina are having a meeting where they are discussing about how to market their “product” to hurricane victims.

Having said that, this story from the recent edition of Education week describes a scam that will be difficult to overcome. He reports that the payday loan industry – those funny folks who give two-week loans to their struggling fellow citizens at 200, 300, or 400 percent interest – are now pushing their scam on parents of returning kids. school.

a Education week the analysis found dozens of posts on Facebook and Twitter targeting parents who may need a “back to school” loan. Some of these loans – which are personal loans and can be used for anything, not just school supplies – are considered predatory, experts say, with sky-high rates and hidden fees….

“Back-to-school expenses, did you get stressed? A Facebook ad for Tennessee-based Advance Financial read 24/7. “We can help.”

Clicking on the link in the ad takes people to a flexible loan application page, an open line of credit that allows borrowers to withdraw as much money as they need up to their credit limit and repay the loan at their own pace. But it’s an expensive line of credit: Advance Financial charges an annual percentage rate of 279.5%.

Another solution announced for back-to-school expenses: payday loans, which are cash advances intended to be repaid during the borrower’s next payday. The Lending Bear Loan Service, which has branches in Alabama, Florida, Georgia and South Carolina, posted on Facebook that payday loans may be an answer to “Your Child’s Needs.”[ing] school supplies.”

The article reports that industry representatives are uttering the usual platitudes that loans are only for emergencies – blah, blah blah. But, of course, the truth is that the whole profitability of the “industry” depends on borrowers coming back (like cigarette smokers) over and over again that they’ve become addicted. It is Ed Article of the week:

“Each [of these ads] It looked like they were really taking advantage of sensitive people, ”said CJ Skender, clinical professor of accounting at the University of North Carolina at Chapel Hill Business School, who reviewed some of the back-to-school announcements. Education Week application. .

“Outrageous” triple-digit interest rates make it extremely difficult for borrowers to get out of debt, he said.

Click here to read the full article.

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