struggle to keep up with day-to-day expenses in today's economy. Many turn to payday
loans as a temporary fix for financial stress. Scammers are now cashing in
on this situation to scare people into paying bills they don't owe.
High Price for Payday
loans are small, short-term, high-interest loans that typically come due on your
next payday. The way they work is you write a check to the lender for the
amount of the loan plus the lending fee. The lender gives you cash for the loan
amount and holds your check for deposit for two weeks, or until your next
convenient, payday loans come at a very high price. The lending fee (generally
15 to 30 percent of the loan amount) applies each time the loan is extended.
The real cost of these loans (the annual percentage rate of interest) ranges
from an astounding 300 to 1000 percent!
people unable to get credit elsewhere turn to payday loans to help them through
desperate times. Scammers are taking advantage of these borrowers'
vulnerability to con them out of even more money.
2009, the Better Business Bureau warned about a telephone scheme
targeting people nationwide. Phony bill collectors call accusing people of not
repaying payday loans. Victims are told they'll be arrested if they don't
immediately wire a $1,000 payment or provide bank account or credit card
It's Still a Problem
scammers haven't given up, though. For example, in May 2011, Arizona's attorney general warned people about a similar
scam. Consumers are receiving collection calls from fake law firms or fake
government agencies telling them they owe money to a payday loan company and
threatening them with legal action.
cases, consumers are duped because the scammers use official sounding company
names and they know a lot of personal information about the victims, like
their social security numbers, driver's license numbers and old bank account
numbers. They sometimes refer to the victim's employer and even mention the
names of personal friends and professional colleagues.
Can You be Arrested?
allows you to be arrested for failing to pay a payday loan or other type of
loan. In fact, there's a law making it unlawful for bill collectors
to threaten you with arrest.
Monday, June 17 2013 9:22 PM EDT2013-06-18 01:22:37 GMT
(CNN) - General Motors is recalling nearly 194,000 vehicles because of a fire danger. GM said water can get into an electronic module in the door, causing it to short circuit and catch on fire. The recallMore >>
GM said water can get into an electronic module in the door, causing it to short circuit and catch on fire.More >>
"Sesame Street" has helped kids deal with divorce, death and even hurricanes. The show is now introducing its first Muppet to have a dad in jail. 1 in 29 children in the U.S. has a parent behind bars. The Sesame Workshop has an online tool kit parents can use to help kids. More >>
Tuesday, June 11 2013 1:36 PM EDT2013-06-11 17:36:50 GMT
The Boys & Girls Clubs' Race for Kids & Wellness Festival presented by Cleveland Clinic is a family-friendly combination of a 5K run, or a 1 mile run/walk, and a celebration of health! The event willMore >>
The Boys & Girls Clubs' Race for Kids & Wellness Festival presented by Cleveland Clinic is a family-friendly combination of a 5K run, or a 1 mile run/walk, and a celebration of healthMore >>
For the 2013-14 rankings, U.S. News surveyed 179 pediatric centers to obtain clinical data in 10 specialties and asked 150 pediatric specialists in each specialty where they would send the sickest children.More >>