The Clinton Herald, Clinton, Iowa

Opinion

December 21, 2013

How easy is it to get an online payday loan?

I get a fair number of complaints from folks who say they just got a phone call from someone threatening to send the sheriff or the police out to arrest them, for committing fraud.

The fraud?

Not paying back an online payday loan. These callers usually quote a debt owed for several thousand dollars, but are willing to settle for 20 or 30 percent of that if you make a payment immediately, as in “right now.” These callers will use legal terminology and titles such as “investigations unit” or “fraud division”, which causes some consumers to think the callers are directly linked to law enforcement.

First of all, law enforcement is not out debt collecting for payday loans. I’ve written before about the rules for debt collecting, and threatening arrest is a big no-no for debt collectors. So consumers who hear such threats should know right away these callers are not above stretching the truth and anything they say is suspect. I encourage anyone getting such threats to contact me.

After hearing dozens of these complaints, I started to wonder: Why do online payday loans seem to be behind these supposed debts? I did some research. I learned the payday loan industry made $49 billion (that’s billion with a b) in loans in 2012. One third of the loans happened through online applications. The entire payday loan industry is very controversial. The practice of offering these high-interest loans, usually in excess off 360% annual interest, is banned in fifteen states. Consumer advocates claim the industry preys on the poor and desperate, leading them into a cycle of perpetual debt. The industry defends itself by claiming they serve a segment of the populations which cannot get loans anywhere else.

A reporter from Planet Money, a radio news show, did some of the same research. The reporter applied for an online payday loan through a website offering such loans. The reporter made up everything on the online loan application, including her name, address, and social security number. She provided her real phone number, however. She got an immediate response, telling her a loan company pre-approved her for a loan. But she did not get just one response. She received dozens of calls, over a period of months, offering loans up to $5,000, from many different loan companies. Many of the calls came from callers with strong foreign accents.

Text Only
Opinion
  • Scott Levine mug LEVINE: Hope is back at Roosevelt building

    August 1, 2014 1 Photo

  • Holly Youngquist Friends of the Library book sale is underway

    Friends of the Library Book Sale is open now. The sale is open to all until 8 p.m. today and on Friday, Aug. 1, from 9 a.m. to 8 p.m. Finally, Saturday, Aug. 2, is box day. From 9 a.m. to  3 p.m., books will sell at $3 per box.

    July 31, 2014 1 Photo

  • LETTER TO THE EDITOR: Cremation service helped pet owner in her time of need

    I wanted to share some positive news about a business located in Clinton that I’m guessing most residents aren’t aware even exists. It’s Northridge Pet Cremation on Main Avenue and for me they were recently a godsend.

    July 31, 2014

  • LETTER TO THE EDITOR: A Cappella choir concert was a success

    The CHS A Cappella reunion was great. It was real great to hear so many good voices of so many former choir members.

    July 31, 2014

  • LETTER TO THE EDITOR: Time to boost social security

    It's time for Congress to act so that Social Security benefits can finally start to keep pace with the cost of living.

    July 31, 2014

  • Dangerous Darkies Logo.png Redskins not the only nickname to cause a stir

    Daniel Snyder has come under fire for refusing to change the mascot of his NFL team, the Washington Redskins. The Redskins, however, are far from being the only controversial mascot in sports history.  Here is a sampling of athletic teams from all areas of the sports world that were outside the norm.

    July 29, 2014 3 Photos

  • Off and on the record Let us now praise anonymous sources.The new White House press secretary got into a familiar old spat with the White House press corps the other day over the use of anonymous sources.Josh Earnest — has there ever been a more perfectly named White Hous

    July 25, 2014

  • Be more informed

    Blame the city.That is a favorite pastime of many, including me at times. Driving over that pesky pothole or paying that annual property tax bill can lead to some choice words referencing the city. Nobody takes the brunt of being the scapegoat more t

    July 25, 2014

  • CCC thanks community, collaborators for successful movie night Clinton Community College would like to thank those who participated in the free outdoor movie showing of “Captain America – Winter Soldier” on the evening of Friday, July 18.We are grateful to have such wonderful community collaborators in the Erick

    July 25, 2014

  • Lindley, Tom.jpg Better police needed for college teams enticed to cheat

    The NCAA once cracked down on colleges that went too far luring top prospects, then it targeted teams that lathered players with special treatment. That was until the NCAA's get-tough approach backfired, rendering it ineffective and creating an opportunity for those who want to play dirty.

    July 24, 2014 1 Photo

Poll

With the Clinton County Justice Coordinating Commission and the Clinton County Board of Supervisors discussing proposals to construct a new jail, do you think the time has come for Clinton County to construct such a facility?

Yes
No
     View Results
Facebook