Federal Trade Commission Fines Payday Lending Company for Alleged Deception

Feb 2, 2016 by

Federal Trade Commission Fines Payday Lending Company for Alleged Deception

Companies and individuals that provide financial services to the people of this country – whether big banks or individually owned lending shops – owe it to consumers to be transparent in all of their dealings. We all know, however, that this is not always the case. There are always lenders that will be deceptive. It can be a big bank or the smallest of title loan companies, and the deception can be purposeful or possibly an oversight. The thing is, though, that the Federal Trade Commission (FTC), and other government watchdog groups are making it their collective mission to crack down on deceptive financial practices. Sure, it does seem to happen to alternative financial providers more often than big banks, but it happens nonetheless.

To illustrate this point, the FTC recently settled charges against two different payday lending companies. These charges allege that the lenders charged consumers illegally via inflated and sometimes undisclosed loan fees. The two companies are SFS Inc. and Red Cedar Services Inc. Each company had to pay $2.2 million. By doing so, they were allowed to jointly wave an estimated $68 million in fees to people that did not get collected.

These charges, when totaled up with some previous settlements, add up to a whopping $25 million that the FTC has collected related to this particular case against Red Cedar, AMG Services Inc. and SFS, along with various related lending operations. The case also allowed for about $353 million dollars in debt to be waived. The combined efforts have made this the largest recovery that the FTC has pulled of so far. And there is still pending litigation against some other defendants that will likely bring the total higher.

The Director of the Bureau of Consumer Protection, when asked about payday lending practices, said, “Payday lenders need to be honest about the terms of the loans they offer. These lenders charged borrowers more than they said they would. As a result of the FTC’s case, they are paying a steep price for their deception.”

The charges that kicked all of this off date back to April of 2012. These charges, which were filed in federal court, allege that the lending companies made misrepresentations about how much it would cost consumers to borrow money. This is considered to be a direct violation of the FTC Act. An example from this case was a time when Red Cedar, MNE Services and AMG Services used a contract which told the borrower they would have to pay $309 for a $300 loan. However, the borrower ended up being charged $975.

The defendants have also been accused of failing to disclose the actual annual percentage rates of the loans, along with other terms. This is being handled as a violation of the Truth in Lending Act. To make matters worse for the lending companies, they made preauthorized debits from the bank accounts of borrowers. This is a violation of the Electronic Funds Transfer Act. SFS and Red Cedar operated as lending companies under the names One Click Cash and 500 Fast Cash.

Lending Companies Should Keep These Kinds of Cases in Mind!

This case, like many others that the FTC and CFPB have been behind recently, should serve as a stern warning to lenders that there is always someone looking out for deceptive financial practices. The majority of payday lending companies out there make it a point to be straight with consumers. But it appears that those who don’t will have a heck of a lot of explaining to do; along with a lot of money to cough up.

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Small Mistakes That Cause Big Problems for Your Credit

Feb 2, 2014 by

Small Mistakes That Cause Big Problems for Your Credit

There is probably not one person who wants poor credit. Not many people go around saying they do not care about their credit. There are some small mistakes that anyone can make that can cause big problems for your credit, you need to watch for them and avoid them.

The first mistake is to open too many accounts at one time. Every credit card that you apply for can and will show up on your credit report. This does not look good, the more you have on there the worse that it looks. Each application for a credit card does cost you three to five points on your credit score. They can even show up on your credit score for up to two years, although it only has a negative impact for about half the time that it shows up.

Missing even one payment is another mistake that can cost you big. Missing a payment can cause you to have a larger amount owed. The company that you owe can add late fees to your balance, and not only that the interest will still be adding up. It also looks bad on your credit score, causing it to fall up to one hundred points. Make sure that you are making your payments on time.

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Photo: Wikipedia

Before closing an old credit card account that you have had for years. If you are looking for a new line of credit then closing an old account is not a good idea. It can negatively impact your credit score. So make sure that you think long and hard before closing an old account. Try to look into your future to see if you can see yourself trying to acquire a new line of credit any time in the near future.

It is obvious for anyone who knows anything knows that it is not a good idea to max out a credit card. Maxing out a single credit card can really hurt your credit score. If you have to make a big purchase you will be better off splitting the cost between two different credit cards. Maxing out one will not only show up on your credit score but can impact your ability to get new lines of credit.

You need to make sure that you are checking your credit score at least once a year. The three major credit reporting companies will give you a copy of your credit report for free once a year. You need to make sure that you are checking your credit card for errors. Any errors that are on your credit report will affect you getting a new line of credit. If you find any errors make sure to report them to the company immediately.

If you have a bill that is unpaid and gets sent to a collections agency and do not pay it, it will seriously hurt your credit. There is no reason to ignore these bills, if you have to contact the collections company and set up a payment plan that you can afford. Most of these companies are going to be willing to work with you in order to get the money that is owed to the original company. So just call and see what they can do to work for you.

There are many small mistakes that can really hurt your credit. Your credit needs to be very important to you. You need to make sure that you are doing what is necessary to keep your credit in a good place. Having good credit can help your financial future, and having poor credit can truly hurt your financial future.

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You Cannot Plan For The Unexpected

Dec 31, 2013 by

You Cannot Plan For The Unexpected

Here’s the main thing you have to understand about life: as much as you think that you can plan for things, the unexpected is just around the corner. This is especially true when it comes to your fnances. While you may find that a few months of good fortune allows you to save money and have Financial Relief, you soon find that Unexpected emergencies occur that can lead you back to a situation where you don’t have the money to pay for your monthly bills. It doesn’t matter how financially responsible you may be, these unexpected issues can throw you for a loop. Even if you have put money away, these issues can quickly lead you looking for a loan to make sure that you don’t fall behind on your regular monthly bills. While you may be looking for Payday Loans that you can get either from those who offer Text Loans or Bad Credit Cash Loans for surprisingly little risk, you are also looking for peace of mind that you don’t have to worry about taking a credit hit, and further financial issues, due to events that have occurred.

A Wide Variety Of Events Can Effect One

Risk

There are certain events that are apt to lead you to financial issues. While there are a wide variety of things that can through you for a loop, there are some that tend to occur more than others. For example, if you have a car, you are going to have repairs and services needed here and there. Sometimes, though costs will eat into your savings, and affect your ability to pay monthly bills. Same goes for health issues that either lead a family member into the emergency room or, worse, spending the night in the hospital.

Be Smart About The Loan That You Pick

While there is no such thing as a “no risk” loan, there are some loans that are less risky than others. Payday loans tend to be on the lower side of the risk because they should be paid back the next month, and they are based upon the money that is coming in a paycheck.

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It’s Okay To Start Small

Dec 10, 2013 by

It’s Okay To Start Small

When friends and family members tend to give you Financial Tips here and there, most of them tend to go in one ear and out the other, so to say.

Finance

Finance (Photo credit: Tax Credits)

While it is nice to know that people care about you enough to give you tips to help you with your finances, you tend not to go ahead with their advice until you recognize that you have to. The thing about finances is that most people do not take action until they need to. If they are comfortable with their current financial situations, they aren’t usually willing to “rock the boat”, so to say, and try something new. The thing is, when financial issues do start to occur, it is the time to start taking some of that advice that you get from people who care about you.

Starting Small Is Okay

The last thing that you want to do when it comes to finances is to get overwhelmed. While there are a lot of things that you can do to try and help your finances off, you should not jump into something that you simply are not comfortable with. Starting small is okay when it comes to making chances in your financial situations; jumping into something you don’t understand will not end up helping you like you would want it to. If you are confused about what you should be doing, take the time to talk to a financial professional who can show you what you should be doing step by step.

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How A Cash Advance Can Help You Get Through A Short-Term Crisis

Oct 23, 2013 by

How A Cash Advance Can Help You Get Through A Short-Term Crisis

Are you struggling with a short-term cash problem? Are you looking for a quick and easy solution? A non-secured Cash Advance loan can help solve your short-term financial emergency. A payday loan or a cash advance loan is a short-term loan that is held against your next check allowing you to cover those unexpected emergencies or cash flow problems. There is normally no credit check involved and you can have your money when you need it, no unnecessary waiting and worrying. Payday loans are popular because they are flexible, simple and get the money in your hands fast.

Reasons You May Need a Payday Loanred-cross-bandaids

  • Car Repair will be needed if your car breaks down and you have no access to transportation. It’s important for you to have transportation so that you can get to work. Quick cash can help you get your vehicle repaired before your next paycheck so you can continue to get to work.
  • Many people today are uninsured. You can have a medical crisis that can cause financial problems. You may need to pay for medicine or medical emergencies that you were not expecting. Doctor office bills alone can cost anywhere from $60 and up.
  • Unexpected Bills such as higher utility bills due to warmer summer or colder winter. Extra money may be needed to keep them from being disconnected. School expenses or legal expenses due to divorce or court proceedings.
  • Travel expenses due to the death of a family member or moving out of state. If you live out of town you will have unexpected travel expense to attend funeral services, etc. If you or your child are attending college out of state, you will have travel expense for that as well.
  • For a family illness or death you may have to come up with some money to help pay for the funeral expenses.
  • Taxes such as your property tax or income tax that needs to be paid.
  • If you were in an accident and need to have your car repaired, you may be required to pay a deductible.
  • Storms such as hurricanes, tornadoes, hail or floods can occur at any time. You may need fast cash to have tree limbs or other items that have been damaged by storms removed until you can get your insurance check. You may need cash so that you have temporary shelter available for your family as well such as a motel room. Insurance checks can sometimes take weeks before they get to you.
  • Veterinarian bills. Most people don’t carry pet insurance. What happens if your pet runs out in front of a car and get hit? If your pet has an illness and needs emergency surgery and medicine how will you pay for those expenses? A pet crisis can be expensive. An average emergency pet surgery could cost up to $1500.

General Payday Loan Requirements

  • Must meet the minimum age requirement of at least 18 years of age.
  • Must have proof of income. Income levels vary with each lender. The cash loan is secured against your income. If you don’t have the required income your loan cannot be processed.
  • Must be employed. Some lenders require a certain amount of time that you have to be on the job such as 3 months.

How to Get a Payday Loan

  • Determine how much cash you require.
  • Apply for the loan. It’s fast and easy. You will fill out a simple application online, in person or by phone. You will need basic information such as job and income verification and checking account information such as your checking account number and bank routing number.
  • Once approved, your money will be given to you directly or deposited into your checking account according to what was set up during the application process generally within 24 hours or less.

You don’t need to struggle with short-term financial problems. When you borrow responsibly, payday loans can help you get through a short-term financial crisis until you get your next paycheck. They are designed to give a person an extra boost when cash is needed that cannot wait. When applying for a cash loan, have a clear understanding of the loan requirements, lender fees and interest rates as these vary from state to state and lender to lender.

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