Payday loan lenders prepare for a state-wide battle as legislation was recently introduced to the Texas State Senate by Sen. Wendy Davis, D-Fort Worth, that seeks to regulate the short-term lending industry. The industry is composed primarily of payday lenders, title loan lenders, pawn shops, and tax-refund advance lenders. Read the rest of this entry »
Here at ‘About Payday Loans’ I like to bring you the new in the payday cash advance lending industry as well as be a resource for all those considering payday loans and what to consider before doing so. But this time I don’t have good news to report.
As of December 8, 2010 the FBI sent out a press release for public distribution alerting all payday loan customers of the fraudulent activity that is going on. Apparently, there are a band of unscrupulous individuals going around posing as fake payday lending companies contacting real customers saying that they are late on payment and demanding immediate payment. There are reports that these criminal groups are also trying to squeeze out private information from the customers they are contacting to obtain credit card and other personal details. There is a way to find out if these companies are real or fake. In many cases, customers have just acquired a payday cash advance loan and days later receive a call from the criminals demanding payment in full. This is a sure sign that who you are dealing with is fraudulent. Payday loan companies know when your loan is due and if you are not late or the date does not fall within the agreement you made with your payday loan center, don’t fall for it. Here are some things to look for and tips to follow:
Unavoidable circumstances happen to us most of the time. Today, not one person can get out of the need for cash loans in some type of way in this society. The more we least expect a thing to happen there it goes just popping right before our eyes. The need for cash usually wears that mask. You might stumble with an urgent need for some cash one day and you would feel so lucky if you have saved some amount of cash in your bank account or your piggy bank. However the situation will get worse if you just found your self having nothing at all not until your next payday.
If you are caught in such scenario you need not to worry that much for online payday lenders are here to save the day. For such an urgent need of fast cash loans online this can be made available for you through payday loans. How fast you can have the money you needed should not be questioned given that this payday loan services is available online. Indeed payday lenders are maximizing the efficiency advantage of using the internet to give you the fastest transaction possible. This online payday certainly is the service that you must have to address your urgent needs. Lenders online can give you quick cash no matter what is your reason behind your urgent need for money. Without lining up to something to file your loan application online payday lenders give you the convenience of comfortably sitting in your home while filling up the online forms to have your request for instant cash granted. The application form must be filled up with correct and honest information to be able to take advantage of this fastest way to get into the cash you need. Now the next time you fell short on cash getting some help from online cash advance payday lenders can be a very effective bent to get you through the day.
Needing money fast and no one or bank will lend you any money? Pay day loans can be the answer to your money problems. Internet payday loans are very easy to get in today’s world. You just apply for one, state the necessary information like your monthly income, and wait for the approval. The time you would have to wait for the loan will be like a snap of a finger when compared to that of a regular bank loan approval. The minimum monthly income however may normally be a thousand bucks; it is the only bit of assurance that the lender will have that you can pay your loan. This is done by the lenders since they don’t usually and almost never check out your credit history so it won’t matter whether you have bad credit reports just as long as you have the minimum requirements for the loan’s approval.
Payment on the other hand is fairly easy. Of course you do have to pay your loan in the agreed time in order to avoid penalties and to keep your loan record clean. The lender may ask you to pay the loan directly yourself or may have another arrangement regarding the paym ent procedures.
There’s a big difference when seeking loans from banks and using a pay day loan. Processing time is shorter, payments are easier since you need only to pay one time, no collaterals to make which means no properties or assets to be repossessed by the lender. Though the interest may be higher than normal long term cash advance loans, the payment is again quicker and easier since it will be on a one time basis. The shorter termed payday loan can be easily acquired for money needs that need quick attention. And you will be able to pay them back quicker, too.
To get instant cash one of the getting common way people are utilizing is throughPayday loan lenders help. Online payday services are now held available thus if you need some quick cash however you are too busy to personally process payday loan application you need not to worry much. Lenders online make it possible for their customers to just fill up on-line forms and within 24 hours they can have their requested amount.
Just like any other transaction made online there are issues regarding the security of the Payday loan lenders done online. If you are caught in a very urgent financial need and is thinking about getting assistance from online payday lender but suddenly you heard about this threatening security problem associated with online payday, do not think that all doors have been closed for you. Online payday services really can save you from your financial problems you just have to make sure you are making business with credible and reliable payday loan companies. There are several ways on how you can do this. You may start with avoiding making transactions with online lenders who sent unsolicited advertisement through e-mail. If the payday lender is open with their price and APR you can be certain that what they offer is a legitimate service. On the other hand if the lender asks you to register first before they disclose their pricing and interest rate this is the time when you look for another payday lender. It is also another way on how to spot scam from not to look for the payday lender’s contact information.
If the website of a certain company does not list any of their contact information, doubt and if they provide their physical address, phone numbers or e-mail address make sure these information are genuine. Try calling the company and start asking questions. A great place to start is with a trusted company. One good example is Payday loan lenders
While there are many who using payday cash advance loans there are still many that are interested but unsure how to transact business with a proper lender and if it is actually safe. Be assured as the payday cash advance lending business is growing at healthy rates, there are many laws enforcing payday lenders to deal professionally and ethically with their customers. There are many payday lending sites that claim they are payday loan lenders but they are not. They are screening or trying to get data from the visitor so that they then can use that information for their own benefit.
That is why it is of utmost important that you check the lending company out and make sure they are a certified direct lender. They will have done all proper licensing and be set up legally to transact business online. Cash USA Payday Loans is a great example of such a lender. They make sure that all loans are taken care of properly and that they can provide you with a loan safely and in a timely manner. Today applications can be filled out and approval can be given in minutes. It is more safe than ever to process a cash advance loan online today. If you have any questions be sure to call the company and get a feel for their customer service and practices. You will be glad you did. Give them a call or check out there online application
Correcting the Los Angeles Times
In an editorial today, the Los Angeles Times provided an article that started completely with a false statement. Their writer Nathaniel Popper, wrote the following:
People who pay high fees to borrow from so-called payday lenders generally don’t have bank accounts, but that doesn’t mean banks aren’t making money from them.
This statement is completely false and incorrect. All payday lenders check for following before they make any type of loans.
1. Employment & income: Employment verification letters could be fake, pay stubs could be fake, but checking bank accounts electronically or via phone with a banker cannot be faked. And almost all payday lenders contact banks, either via phone or electronically, to verify employment and income making sure the borrower is indeed employed and receives paychecks on consistent basis.
2. Checking Balance: Payday lenders look at the borrowers bank statement and often reject applicants with too many insufficient funds because those are the type of borrowers that will more likely to default.
3. Direct Deposit: Majority of lenders, in particular online lenders, require their borrowers to receive their paychecks via direct deposit so they can debit payments when it is due. Typically those with direct deposit are less likely to default on their loans.
4. Account Receivable & Collections: Payday lenders often debit payments for account receivable and collection purposes. So it is important for the borrower to have an account.
As you can see, there are many facts the Los Angeles Times writer failed to see before he made that false claim about payday loan borrowers don’t’ have an account. It is important not to confuse check cashing services and payday loan services. It is true that many check cashing stores offer payday loans too but they are complete different products and those customers who borrow payday loans must have a bank account.
As a follow up measure regarding an article on payday loan collections we submitted in July, we would like to share some collection tips and tactics to assist Direct Lenders to increase their liquidation rate.
There are many advantages to keeping your accounts receivables “In-House”. Here are a few key points that are advantageous to our Industry.
1). Loss Prevention: As we all know, the older a debt becomes, the less chance you have to recover your loss. It is also beneficial not to outsource your accounts right away, due to the industry average contingency fees that are charged to payday loan companies by Third-Party Litigating Agencies/Collection Agencies.
2). The Fair Debt Collection Practices Act (FDCPA): Though the intricacies of this act are vast, this act governed by the Federal Trade Commission (FTC) does not generally apply to the original credit grantor. There is a “grey area” regarding creditors and the FDCPA. Under the FDCPA section 803(A) and (B), employees of the original creditor are exempt from its provisions unless they collect the debt under a different name. For example, if the original creditor is ABC, and ABC’s collection division uses the name XYZ when attempting to collect ABC’s debts, then XYZ must comply with the FDCPA.
3). In House Legal Department: In a recent interview with R.L. Armstrong, III, The Director of Collections of The Legal Department of Solomon Finance, Inc., he had this to add, “as your receivables continue to increase, consider forming a in house legal department. There are no special licensing requirements or governmental red tape matters to deal with. We educate our staff on legal industry terminology and definitions so they sound versed and informative. We provide complimentary consumer credit counseling while creating the urgency needed to have our customers make restitution. While diplomacy is virtually unheard of in the collections arena in the payday loan industry, we set ourselves apart from our competitors by implementing these strategies”.
4). Preserving your hard earned image: While the aforementioned tactics enhance your chances of keeping your good name, there will most likely be a time when you need to outsource your receivables to a third party for collections/credit reporting. Perform a thorough due diligence in the selection process. Make sure any agency you are considering is a member of The American Collectors Association (ACA) and are licensed and bonded in the state(s) in which collections need to be performed. Make sure to take a close inspection of the “contract language” of the collection agreement prior to retaining an agency. In the payday loan industry, special addendum usually always must be made to limit the payday loan companies liability.
According to a direct lender of payday advance loans, following are the top five reasons their customers take these loans;
1. To Avoid Overdraft Fees: This is the number one reason why many people take payday loans. Banks on average charge $35 per overdraft and if there are a several transactions, that means that they are going to be several $35 fees that could create a great financial burden on consumer. Taking a payday loan with simple fee, could save consumers from that financial hassle.
2. To avoid late fees on rent\mortgage: Some States have no restrictions on late payments so landlords can charge high late fees, in some cases reported as high as 20% of the rent, if the tenant is late or short on rent. So it seems that many consumers refer to payday loans to avoid such late fees.
3. Auto Related Expenses: Many consumers take payday loans to pay for sudden auto repair or if their vehicle has been impounded. Payday loan customers rather pay a flat small fee than having to without a car.
4. Pay Medical Bills: More medical centers are denying patients without insurance or some sort of payments. So many Americans especially those without a reliable health insurance borrow money to see their doctors.
5. Buy Grocery: Larger middle class families who live paycheck to paycheck need rely on short term loans and payday loans to cover grocery costs when they are short on cash.
The above reasons are the top reasons reported by eadvancepayday.com, who is a direct online lender. This information could vary per lender and per location.
MADISON, Wisc. (Sept. 13th, 2010)- On July 21st 2010 Obama signed the Dodd-Frank bill which proposed the creation of a new consumer financial protection agency which eventually was approved as the Bureau of Consumer Financial Protection (“BCFP”) to oversee and regulate virtually all forms of consumer credit including direct online payday lenders such as Cash USA.
Speculations on the actual effects of this new Bureau to the payday lending industry have been widely debated amongst many media outlets. Despite any inconsistencies in theories, the vast majority of writers seem to agree that the BCFP will certainly deliver a strong blow to the payday lending industry, which has already seen an increase in regulations over the past decade.
Recently, attorney Hilary B. Miller released an article to the payday loan industry blog, a payday loan industry news source, discussing the more realistic implications of this new Bureau and any new regulations for payday lenders.
Surprisingly, despite the media’s early celebration of the demise of the payday lending industry, Mr. Hilary B. Miller projects quite a different future along with his professional opinion and speculation as to why the BCFP may not be quite the threat to payday advance lending that everyone else is predicting.
For example, Mr. Miller makes the observation that, of the 848 page bill there is not a substantive regulation of payday loan and cash advance lending business. Although he does go on to mention “Title X” and the broad reaching power with regulates and enforces “covered persons”, which includes payday lenders. It seems that the real power of the BCRP may lie not only in the specific regulations, but also in the “vague” and vast power of Title X of the Dodd-Frank Bill.
Mr. Miller also surmises that Staff members may in fact be an integral part of the new BCFP, stating that their primary motivation is to “get it right” and that staff members are the “unsung heroes of Washington” whom also “understand science” and “don’t care about getting votes”. If Miller is correct, these objective staff members, who he predicts will make decisions based on science and unbiased research, as opposed to the popular Center for Responsible Lending reports that seemingly distort or leave out any facts that don not paint Lenders in a negative light.
If Mr. Miller is in fact correct, it would be a welcome change to payday lenders everywhere. To date, the majority of regulatory changes overseeing maximum APR’s and fees have been run similar to a “smear” campaign, often times distorting facts and figures. A common practice from opponents of payday lenders is to simply regurgitate the same arguments such as “payday lenders ‘target’ low income families” yet they never seem to acknowledge that like any other private business, or that by limiting APR’s to 36% lenders are only able to charge $1.38 for a $100 loan, thus making it impossible to stay in business.
Hopefully, for both the sake of consumer financial freedom of choice, and the freedom to operate small businesses within the reasonable regulations of the law, Mr. Miller’s predictions will hold true over the next year whilst the BCFP begins to grasp the reigns and oversee the vast financial landscape of America.
