A new payday loan scam hits Florida and Missouri
Posted February 11, 2018 09:30:03A new payday lending scam targeting Florida and Louisiana has prompted some states to require payday lenders to disclose the names of borrowers and the amount of their loans, according to the National Association of Home Builders.
Nationwide, more than 8,600 payday loan lenders operate in the United States, according the National Home Builder Association, and many of the lenders have taken steps to improve their customer service to avoid the potential for fraud.
The National Home Builder Association is pushing for the FTC to take action on the issue, saying that if payday lending is going to remain a major part of American life, it needs to be regulated.
Payday loans have been around for decades, and they are increasingly becoming popular as the number of Americans with a financial need increases.
Many borrowers who receive payday loans have a lower income than their parents, and borrowers often borrow heavily.
Some lenders use the information in payday loans to offer a higher interest rate than the traditional loan, or to charge higher fees to people who do not qualify for a traditional loan.
A payday loan can also include a hidden fee.
A new national survey released Tuesday by the National Consumer Law Center found that about half of payday loan borrowers in the U.S. had a credit score of below 620.
About one in four payday loan customers said they have had to repay their loan more than 10 times.
PayDay lenders have been a focus of scrutiny by the FTC since the agency announced in September that it was taking action against lenders.
The FTC said in a statement that it has taken action to investigate at least 17 companies for deceptive practices and other violations related to payday lending, and has launched a public campaign called “Lenders are Liars” to highlight the issue.
Federal regulators said last month that they had launched a criminal investigation into payday lending and payday loan companies that violate consumer protection laws, such as consumer protection rules for payday lenders and consumers.
In response to the recent FTC announcement, the Office of the Comptroller of the Currency issued a rule requiring payday lenders in the country to report customer information on payday loans.