usury

[faceless_wonder]

a couple of years ago they started running those CashCall ads on television. i always found them really scary. all they said was "need cash? make the CashCall." it didn't discuss the specifics of the loans; it didn't discuss any of the terms. all it said was to call them and get cash.

thanks to increased scrutiny on the usury industry, payday loans and other nontraditional lending institutions are having to disclose more information in advertisements, and warn people of the obvious fact that they have to pay the loans back in a timely fashion. this is necessary...these places advertise on daytime television, billboards, and bus shelters, preying on people who are short on cash and desperate enough to fall for the quick fix they are selling, not realizing how expensive such a "solution" will be in the end.

now, the CashCall ads have a disclaimer telling people to make sure they can pay the monthly payments before taking out a loan. that's not the part i found remarkable. at the end of the new ad, it says in the fine print that the average APR on one of these CashCall loans is 99.25%.

O.O

*jaw drop*

at least they are disclosing that fact now. but, such a high interest rate should not be relegated to the fine print. almost 100% APR? if there weren't already so much proof that a lot of these companies are in business to steal from whoever will fall for it, this is surely it. it's disgusting.

Comments

[insertnamehere2.livejournal.com]

Holy shit!

I thought the legal limit was 24.99% (as long as it was under 25)!

I'm sorry, I have to say it again: Holy shit!!

[xioley.livejournal.com]

Huh. I must have started typing before you posted. So...I pretty much 2nded you, I guess.

[faceless-wonder.livejournal.com]

seriously. i thought there was some kind of cap...i should do some poking around and figure out how they can get away with it.

[xioley.livejournal.com]

99.24%?!?!? Holy wow, that's insane! And kind of evil, in a business-y way.

I thought I heard somewhere that credit card companies weren't legally allowed to charge APR's higher than 30% (which is still really, really high), but I imagine that 'lending companies' have found a loophole?

[faceless-wonder.livejournal.com]

i'm sure there's some kind of loophole, as i'm sure the rates that the payday-loan companies charge must be higher than 25% as well.

i'm on their website, and what's crazy is that they have even higher APRs on some loans, in some states. i'm sure they just look at the state laws, find the highest rates they can get away with charging, and do it.

[nancy-whiskey.livejournal.com]

I did an internship in a bankruptcy firm after my first year and SO many of the clients were affected by these. They're really hard to track down, too. Ugh.

[faceless-wonder.livejournal.com]

i've never worked at a bankruptcy firm...but one day i was poking around on a person-to-person lending site online, just to see what it was. there were TONS of people who were asking others for loans specifically to pay back CashCall.

it's sick, really.

[serawench.livejournal.com]

I have been in a payday "loan" loop (my stepdad surprised me and got me out of it on January 3) and I can tell you the loophole is likely that they classify their "interest" at about 5-8%, but charge a buttload of "administrative" fees per $100 borrowed. They get up to a higher percentage rate of interest by masking it as admin fees. It's sneaky and really dirty.

[faceless-wonder.livejournal.com]

that may very well be how they get around the law. they have the fees on their website, and iw as reading...and they're ridiculously high. in a lot of states, they charge a $500 "loan origination fee" on a $1000 loan.