Cowboy capitalism in the U.K.?
November 13, 2008 | Nevada, industry, regulation, states | Comments (0)The Federal Trade Commission has charged several internet payday lenders, mostly based in the U.K., with violating disclosure laws and abusive collection practices. The Payday Pundit has often talked about unregulated internet lenders. If more storefronts close, there will be more of this. From the story:
According to the complaint filed by the FTC and the State of Nevada, through Web sites such as www.cash2today4u.com, the defendants offered consumers loans of $500 or less within 24 hours without requiring a credit check, proof of income, or documentation. Consumers who applied for a loan on the defendants’ Web site were required to provide their bank account and Social Security numbers.
As stated in the complaint, the defendants’ representatives called applicants and told them that they qualified for a loan, typically around $200, that had to be repaid by their next payday with a fee ranging from $35 to $80. They explained that if the loan was not repaid by then, it would be extended automatically for an extra fee that would be debited from the consumer’s bank account “until the loan is repaid.” Consumers were required to give the defendants access to their accounts for payment of the fees. Some consumers were told to call the defendants before their payday to ask them to debit the full loan amount from their accounts.
Hang ‘em.
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