Fraud and Abuse Online: Harmful Practices of Inernet Payday Lending
Online payday loan operators threaten their customers, promote loans designed for long-term indebtedness, and charge exorbitant interest rates, according to a study by the Pew Charitable Trusts.
“Lump-sum loans online typically cost $25 per $100 borrowed per pay period—an approximately 650 percent annual percentage rate,” Pew said.
The report, “Fraud and Abuse Online: Harmful Practices in Internet Payday Lending,” (PDF) comes a month after the Federal Trade Commission halted an only payday scheme that the government said “allegedly bilked consumers out of tens of millions of dollars by trapping them into loans they never authorized and then using the supposed ‘loans’ as a pretext to take money from their bank accounts.”
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