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Dangers of applying for an online payday loan

As consumers move their financial activities online, applying online for a payday loan may seem like the natural thing for a cash-strapped person to do.

But you could be setting yourself up for a world of hurt, from paying exorbitant interest rates to having funds swiped from your bank account to being threatened by debt collectors. Just filling out an application could be enough to begin the harassment and thievery.

“Absolutely the worst thing you can do is apply for an online payday loan,” says Jay Speer, executive director of the Virginia Poverty Law Center.

Most online payday loan sites aren’t even operated by lenders. They’re run by “lead generators,” who seek your personal information, such as Social Security number, driver’s license number and bank account details. They then sell that information to lenders.

“Your email and telephone explode after that,” Speer says, as lenders vie to offer you cash. That can happen even if you live in one of the 15 states where payday loans are illegal.

Lenders aren’t the only ones in the market for your personal information. “There’s a good chance they sell to fraudsters — people who come after you months or years later,” he says.

Sandra Green (not her real name) has experienced this firsthand. The Virginia woman turned to online payday loans after her husband was injured and couldn’t work for two years. Their credit was damaged and they couldn’t get cash to pay their bills from traditional financial institutions.

Green took out several loans totaling $3,000 to $4,000 starting around 2010. The lenders that she received cash from took their payments from her bank account — but they weren’t the only ones. A company she had never heard of swiped money from her account, creating an overdraft.

She filled out a request for the bank to stop payment. That worked for about six months, and then the withdrawals started again. “People will change the identity of the company and then they’ll hit it (the account) again. Once they do this it’s a never-ending cycle,” she says.

Companies she’d never done business with would call her at work and at home, harassing her. One threatened to file papers with the local sheriff’s office if she didn’t pay immediately.

“They get really belligerent when you don’t do what they want you to do,” Green recalls.

She feared she’d wind up in bankruptcy because of the loans and finally sought help from Blue Ridge Legal Services, a Virginia legal aid society, in 2013. Blue Ridge connected her with the Virginia Poverty Law Center.

Speer says of online payday lenders: “These people are like sharks. If you give them some money it’s like throwing blood in the water.”

Payday loans are generally described as small, short-term loans. A consumer writes a check for the amount borrowed, plus a fee. The lender advances money against the check and the check is held until the next payday, when the loan and fees must be paid. Or, in the practice used by most online lenders, a consumer can grant the lender access to his bank account, and the lender electronically accesses the account to deposit money and withdraw payment.

Even paying back legitimate loans carries astronomical costs. Green took out a loan of $350. It took six weeks for her to pay it back, and she paid nearly $300 in fees.

Online payday loans boom
Her experiences are not uncommon. “Fraud and Abuse Online: Harmful Practices in Internet Payday Lending,” a 2014 study by the Pew Charitable Trusts, found online installment payday loans typically have an APR of 300 percent to more than 700 percent. Online lump-sum payday loans have a typical APR of 650 percent, or $25 per $100 borrowed per pay period. Exorbitant fees are also charged, and initial payments might not be applied to the loan’s principal.

Online payday lending is big business. Revenue tripled from $1.4 billion in 2006 to $4.1 billion, according to Pew.

Of the more than 250 online payday borrowers surveyed by Pew, almost 40 percent said their personal information was sold to a third party without their knowledge. Nearly one-third had an unauthorized withdrawal from their account.

Threats were common, with 30 percent of those surveyed saying they were threatened by an online lender or debt collector.

“Harassment and fraud are really concentrated in the online lending market,” says Nick Bourke, project director for Pew’s study on payday loans.

Part of the problem stems from the fact that there’s no control over who can get your information once you apply for an online payday loan. “People’s personal information can be spread far and wide,” Bourke says.

Even if the loans are fraudulent, a consumer’s failure to pay them may be reported to one of the three main credit bureaus, Speer says, which can impact a consumer’s ability to rent an apartment or land a job.

Many storefront payday lenders are fed up with the behavior of these online payday lenders.

“These unlawful lenders roam the Internet trolling for customers. They are scammers. They are fraudsters,” says Amy Cantu, spokeswoman for the Community Financial Services Association of America, which represents more than half of the country’s storefront payday lenders.

Though online payday lenders represent just one-third of the marketplace, 90 percent of payday lending complaints filed with the Better Business Bureau are aimed at them, according to Pew.

Self-regulation efforts
Association members vow to adhere to the organization’s best practices, which include complying with state and federal laws, being licensed in each state in which they do business and adhering to acceptable debt collection practices.

Some of the association’s larger members also have an online presence, she says, but those sites also adhere to the organization’s best practices.

Cantu says she understands that consumers with financial troubles may prefer the anonymity of the Internet when seeking cash, rather than walking into a storefront payday lender. But online lenders are supposed to only operate in the states that allow payday lending.

Her organization wants the federal consumer watchdog agency, the Consumer Financial Protection Bureau, to crack down on illegal lenders.

Agencies crack down
Already the CFPB and the Federal Trade Commission are stepping up action against fraudsters. In a joint news conference in September, the agencies announced they’d filed suit against two online payday lenders.

The CFPB sued Kansas City-based Hydra Group, while the FTC sued CWB Services, also based in Kansas City.

The CFPB received more than 1,300 consumer complaints about the Hydra Group.

At the news conference, CFBP Director Richard Cordray accused the Hydra Group of “running an illegal cash-grab scam to force purported loans on people without their prior consent. It is an incredibly brazen and deceptive scheme.”

Both the Hydra Group and CWB Services were accused of buying personal information, including bank account numbers, from lead generators. The companies would deposit money into consumers’ bank accounts without any signed agreements, and then make unauthorized withdrawals from the accounts. If a consumer complained, the companies would produce false loan documents.

In 15 months, the Hydra Group made $97.3 million in loans and collected $115.4 million from consumers.

Even if consumers closed their accounts, their information might have been sold to debt collectors, who then attempted to collect more money.

A federal judge temporarily shut down the Hydra Group, freezing its assets. The CFPB is requesting a permanent shutdown, along with penalties imposed upon the company and refunds made to consumers.

With CWB Services, the federal court froze the company’s assets and appointed a receivership and the FTC is requesting consumers’ money be refunded. The company had raked in $46 million in 11 months, said Jessica Rich, the FTC’s director of the Bureau of Consumer Protection.

Bourke says the CFPB should ensure that small loans are tailored to the borrower’s ability to pay them off and should provide more protection to consumers, particularly against illegal debt collection practices.

“The core of the problem is that payday loans don’t help people. They drive people further into debt and distress,” he says.

See related:Know your credit card fraudster

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Know your rights under the Truth in Lending Act

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New protections from financial ‘gotchas’ in 2015Dangers of applying for an online payday loanCFPB orders refunds for 98,000 subprime cardholdersFighting back against the growing threat of tax fraudFinanceLoanspayday loanbank account […]

Banks say no room to cut loan rates despite RBI's rate cut

Only three of the country’s 45 commercial banks have cut base lending rates since the Reserve Bank of India’s (RBI) surprise easing on January 15, hurting the government’s drive to lift business investment.

Bank executives insist they cannot lower loan rates despite the official interest rate cut because cash conditions are tight, and money markets are little changed since the cut, but RBI insiders see that as more an excuse to protect profit margins.

The failure to pass on the rate cut to businesses and consumers has both diluted the impact of monetary policy and weakened the push by the government to quickly unlock more credit and spur investments as the economy struggles to recover from its slowest growth rates since the 1980s.

“We are already providing liquidity higher than what the banking system requires. We do not plan to increase that amount,” said a senior policymaker with knowledge of the central bank’s cash management strategy.

“Banks need to manage their assets and liabilities more efficiently,” he added.

Bankers say the average funds the RBI provides the market has been steady at around Rs 1 lakh crore ($16.2 billion) a day since the repurchase (repo) rate was cut by 25 basis points to 7.75 per cent.

The slashed rate has had little impact in financial markets, suggesting a blockage in policy transmission.

The interbank overnight cash rate, a key measure of cash conditions that tends to track the repo rate, has remained around 8 per cent despite the rate cut.

Furthermore, three-month wholesale deposit rates have held near 8.50 per cent and the one-year wholesale deposit rate has risen 10 basis points to 8.60 per cent.

The Reserve Bank manages the amount of liquidity in the market to aid transmission of its rate decisions. The next scheduled policy review is on Tuesday, but analysts do not expect it to ease again at least until after the Union Budget at the end of February.

“If RBI provided slightly more liquidity than what it is providing now, it will force banks to cut their base lending rates,” said CVR Rajendran, chairman and managing director at state-run Andhra Bank.

Analysts say the RBI will eventually have to inject more funds, although may not as much as lenders want, if it continues easing monetary policy.

Bank of America-Merrill Lynch believes the central bank will need to inject around US $49 billion in new money to the banking system during 2015-16 (April-March) if lenders are to lower lending rates enough to meet the brokerage’s projections for a recovery in credit growth to 17.5 per cent in the comig 2015-16 financial year.

Credit grew at an annual rate of 10.7 per cent in early January, near decade lows, and the Narendra Modi government has been seeking lower interest rates to help spark a revival in lending to business.

Earlier in January, the RBI mandated that lenders change the methodology used to compute the base rate, or the minimum lending rate, in a bid to spur more lending.

Banks continue to suffer from deteriorating asset quality, which is pressuring earnings. Bank of Baroda, the country’s second-biggest lender by assets, on Friday posted a 69 per cent fall in quarterly profit due to higher provisions for bad loans and a surge in tax expenses.

An executive at a public sector bank acknowledged profit was a factor in the reluctance to lower lending rates but said liquidity was a bigger issue.

“There is a lot of micro-management of liquidity by RBI. Banks are taking their own time to cut lending rates because we are still not sure about RBI’s liquidity policy,” he said.

“Typically banks are faster in raising lending rates than cutting to enjoy fat interest margins,” the executive added.

(Reuters)

[…]

Feds Target Suspected Payday Loan Scams | Money Talks News

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The Consumer Financial Protection Bureau has sued online payday lender Hydra Group for allegedly making fraudulent loans to unsuspecting consumers, then scamming them out of millions of dollars.

From our Solutions Center: Help with credit card debt

The allegations are nearly identical to a separate lawsuit the Federal Trade Commission filed earlier this month against CWB Services and several other companies. According to The New York Times:

In both cases, consumers submitted information about themselves — including bank account numbers — to online payday loan comparison sites. These so-called lead generators auctioned the information to payday lenders or to brokers, who resold the information, officials said. The suits say that in this case, unscrupulous buyers then used the information to deposit money into consumers’ bank accounts and then make unauthorized monthly withdrawals.

Authorities say Hydra Group and CWB Services bought the consumers’ information so they could make payday loans, then withdraw “finance charges” out of the unwitting borrowers’ bank accounts.

The CFPB said Hydra Group in a 15-month period made $97.3 million in loans, usually without consumers’ authorization, and then collected $115.4 million in return. “After depositing the payday loan, typically $200 or $300, it then withdraws a $60 to $90 ‘finance charge’ from the account every two weeks indefinitely,” the CFPB said. Thousands of dollars in finance charges were passed on to some consumers.

“The utter disregard for the law shown by the Hydra Group and the men controlling it is shocking, and we are taking decisive action to prevent any more consumers from being harmed,” CFPB director Richard Cordray said in a statement.

Meanwhile, the FTC alleges that CWB Services, along with other related companies, issued $28 million in payday loans in an 11-month period to unwitting consumers, and then extracted $46.5 million from those consumers’ bank accounts, USA Today said.

Like the Hydra Group payday loans, consumers would find a $200 to $300 loan deposit, followed by withdrawals of $60 to $90 for finance charges every couple of weeks, according to the Times.

“This egregious misuse of consumers’ financial information has caused significant injury, especially for consumers already struggling to make ends meet,” said Jessica Rich, director of the FTC’s consumer protection bureau.

In most cases, consumers had been comparison shopping for payday loans, but hadn’t actually applied for a loan, so were caught off guard when extra money showed up in their account. In other cases, “consumers had authorized a loan for what they thought was a one-time fee but found that payments had been withdrawn but not applied to their principal,” the Times said.

When consumers complained or banks questioned the withdrawals on behalf of their customers, the payday loan firms allegedly presented false authorization documents.

High-interest payday loans have been under fire in recent years for trapping low-income borrowers in a perpetual cycle of mounting debt.

What do you think of payday loans? Share your comments below or on our Facebook page.

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[…]

Local woman has warning about payday loan scam

Las Vegas, NV (KTNV) — Most of us need a little extra cash in our pocket from time to time. When funds are low, some turn to a payday loan company.

But as one Las Vegas woman recently learned, you’ve got to be careful about who you do business with.

“So it’s just been really, you know, I’m having a hard time,” said Sandra Pickens.

She said money is tight. She’s been out of work for the last nine months. To cover her expenses, Sandra said she applied for a payday loan.

“Just did a Google search you know, put in a general application,” said Sandra.

Sandra said she applied through an unknown service, that sent her application to a number of loan providers. Shortly after, she got a call from someone claiming to be a lender.

“I couldn’t understand what he was saying. I’m like, excuse me. What do I need to do? Who are you calling from?” said Sandra.

The person told Sandra she was approved for a $2,000 loan. But before getting the money, Sandra was told she’d have to pay an up front fee of $200.

“He’s like, well we need you to go purchase a prepaid card, like Green Dot, and put $200 on the card and then call us back,” said Sandra.

She said the request raised a red flag. Not only did she feel uncomfortable sending money, but she explained, she didn’t have $200.

“He was like can’t you go borrow it from your friends and family? And I’m like if I could, I wouldn’t be borrowing it from you,” said Sandra.

That’s when Sandra hung up and decided to reach out to Contact 13. She wants to make sure others know who they’re applying with, when looking for a payday loan.

“He had all my personal information. My date of birth, my social, where I live. I’m just glad I got the sense, to, I’m not sending them any money,” said Sandra.

Here’s the contact 13 bottom line: The Federal Trade Commission says if you’re told to pay a fee in advance for a loan, then it’s a scam. Never send money to someone you don’t know with a prepaid credit card or through a wire service.

Once that money is sent, it’s gone for good.

[…]

Local woman with warning about payday loan scam

Las Vegas, NV (KTNV) — Most of us need a little extra cash in our pocket from time to time. When funds are low, some turn to a payday loan company. But as one Las Vegas woman recently learned, you’ve got to be careful about who you do business with.

“So it’s just been really, you know, I’m having a hard time, says Sandra Pickens.

She says money is tight. She’s been out of work for the last 9 months. To cover her expenses, Sandra says she applied for a payday loan.

“Just did a Google search you know, put in a general application,” says Sandra.

Sandra says she applied through an unknown service, that sent her application to a number of loan providers. Shortly after, she got a call from someone claiming to be a lender.

“I couldn’t understand what he was saying. I’m like, excuse me. What do I need to do? Who are you calling from?” says Sandra.

The person told Sandra she was approved for a $2,000 loan. But before getting the money, Sandra was told she’d have to pay an up front fee of $200.

“He’s like, well we need you to go purchase a prepaid card, like Green Dot, and put $200 on the card and then call us back,” says Sandra.

She says the request raised a red flag. Not only did she feel uncomfortable sending money, but she explained, she didn’t have $200.

“He was like can’t you go borrow it from your friends and family? And I’m like if I could, I wouldn’t be borrowing it from you,” says Sandra.

That’s when Sandra hung up and decided to reach out to Contact 13. She wants to make sure others know who they’re applying with, when looking for a payday loan.

“He had all my personal information. My date of birth, my social, where I live… I’m just glad I got the sense, to, I’m not sending them any money,” says Sandra.

So here’s the contact 13 bottom line. The Federal Trade Commission says, if you’re told to pay a fee in advance for a loan, then it’s a scam. Never send money to someone you don’t know, with a prepaid credit card or through a wire service.

Once that money is sent, it’s gone for good.

If you feel you’ve been the target of a scam, remember, we’ve got your back Southern Nevada. Contact us at 13investigates@ktnv.com. For Contact 13, I’m Tricia Kean.

[…]

Extra interest-free loan for sugar mills to pay cane arrears

New Delhi, Jun 23 (PTI) : The Union government on Monday decided to provide additional interest-free loan of up to Rs 4,400 crore to cash-starved sugar industry for paying cane arrears.

In order to bail out sugar mills that are unable to pay Rs 11,000 crore dues to sugarcane growers, the government also decided to increase the sugar import duty to 40 per cent from the existing 15 per cent and extend subsidy of Rs 3,300 per tonne on export till September this year.

Efforts will also be made to ensure 10 per cent ethanol blending with petrol.

These decisions were taken at a high-level meeting called by Food Minister Ram Vilas Paswan following the Prime Minister’s direction.

The Principal Secretary to the PM, Nripendra Misra, and Cabinet Secretary Ajit Seth were also present in the meeting.

After the meeting, Paswan said: “We have taken four key decisions. We have decided to extend the interest-free loan given against excise duty paid by sugar mills for five years instead of three years.”

Mills can avail themselves of additional interest-free loans of up to Rs 4,400 crore from banks, he said, adding that this will improve their cash flow to make cane payments.

The minister said the department is yet to calculate the exact interest-free loans to be provided to the industry.

In December, the Centre had approved Rs 6,600 crore interest-free loans for the sugar industry exclusively for clearing sugarcane arrears. It decided to give loans via banks equivalent to the excise duty paid by the mills in the past three years.

“These decisions will be announced subject to the condition that mills give guarantee that they will clear Rs 11,000 crore sugarcane arrears at the earliest,” Paswan told reporters.

”We don’t have any problems to announce these incentives formally if millers are ready to make payments. If they give assurance today, we will announce incentives today itself.”

He said some of the decisions would be notified by ministries concerned, while some require the Cabinet nod.

Besides Paswan, Transport Minister Nitin Gadkari, Commerce Minister Nirmala Sitharaman, Petroleum Minister Dharmendra Pradhan, Women and Child Development Minister Maneka Gandhi, MSME Minister Kalraj Mishra, among others, were present in the meeting.

Besides interest-free loan, Paswan said, “We have decided to increase the sugar import duty to 40 per cent from the current 15 per cent and extend the sugar export incentive of Rs 3,300 per tonne till September this year.”

Paswan said that the Petroleum Minister has assured 10 per cent ethanol blending with petrol. Currently, ethanol blending is not even two per cent.

Expressing concern over mounting cane arrears, Paswan said, “While the Centre fixes the cane price, some states are fixing higher prices that are putting burden on millers. There should be a holistic view on pricing.”

The sugar industry has been facing a cash crunch due to higher cost of production and lower selling prices in the wake of surplus output over the past few years.

Currently, sugarcane arrears stand at about Rs 11,000 crore across the country, with the maximum of Rs 7,200 crore in Uttar Pradesh.

Mills say they are facing a cash crunch as domestic prices have slipped below the cost of production, hurting their profits. They also fear domestic prices could fall further if cheaper imports are not curbed.

[…]

Bihar ministers richer than Nitish Kumar

Patna, Jan 2 (IANS) Bihar Chief Minister Nitish Kumar is poorer than his cabinet colleagues — as far as cash assets are concerned. According to details of movable and immovable assets declared by the chief minister and his cabinet ministers for 2012, Nitish Kumar has Rs.14,475 in cash.

This was less than the Rs.46,974 he had in 2011.

Deputy Chief Minister Sushil Kumar Modi has Rs.20,000 in cash and Tourism Minister Sunil Kumar Pintu Rs.8.74 lakh.

Cash with others vary: Public Relations Minister Brishen Patel (Rs.4 lakh), Industry Minister Renu Kumari (Rs.5,000), Food and Consumer Protection Minister Shyam Razak (Rs.80,000), Energy Minister Bijendra Prasad Yadav (Rs.60,000) and Rural Development Minister Nitish Mishra (Rs.96,992).

Nitish Kumar’s other assets remain more or less the same as declared last year: a house in Sansad Vihar in New Delhi valued at Rs.40 lakh, movable assets worth Rs.6.15 lakh, a 2003 model car, an old television, an old air-conditioner, a refrigerator, a cooler and cows.

The chief minister’s assets include a computer and a treadmill. He has also taken a loan from a bank.

Nitish Kumar has disclosed his only son Nishant’s assets, including agricultural land in Kalyanbigha village. But his son has more wealth.

This is the third occasion when details of assets of 29 Bihar ministers were uploaded on the government website. It was first done in 2011 and later in 2012.

Deputy Chief Minister Modi has movable and immovable assets worth over Rs.1 crore.

The richest minister former lawyer P.K. Shahi, who declared movable and immovable assets worth more than Rs.5 crore.

[…]

Nitish Kumar only has Rs.14,475 in cash

Patna, Jan 2 (IANS) Bihar Chief Minister Nitish Kumar has lower assets than most of his cabinet colleagues.

According to details of movable and immovable assets declared by the chief minister and his cabinet colleagues for 2012, Nitish Kumar has Rs.14,475 in cash. The amount was Rs.46,974 in 2011.

Deputy Chief Minister Sushil Kumar Modi has Rs.20,000 in cash while tourism minister Sunil Kumar Pintu has Rs.8,74,000.

The cash held by Public Relations Minister Brishen Patel is Rs.4 lakh while the amount is Rs.5,000 for Industry Minister Renu Kumari and Rs.80,000 for Food & Consumer Protection Minister Shyam Razak.

Energy Minister Bijendra Prasad Yadav has Rs.60,000 in cash while Rural Development Minister Nitish Mishra has Rs.96,992.

The list of Nitish Kumar’s other assets are more or less the same as declared last year.

These include a house in Sansad Vihar in New Delhi valued at Rs.40 lakh and moveable assets worth Rs.6.15 lakh, a 2003 model car, an old TV set, an old air conditioner, a refrigerator, a cooler and some cows, a computer, a treadmill and a bank loan.

The chief minister has also disclosed assets of his only son Nishant, which includes land at ancestral Kalyanbigha village. But Nishant has more assets than his father.

Sushil Kumar Modi has assets worth over Rs.1 crore.

The richest member of the Bihar cabinet is P.K. Shahi, a lawyer, who declared assets worth over Rs.5 crore.

This was the third occasion when details of assets of 29 Bihar ministers were uploaded on the government website as a step towards transparency.

[…]

I borrowed £150 … now I owe £10k

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IN austerity Britain, one industry is thriving – the controversial payday loans business.

The trade in short-term lending has increased by four times this year, while more and more borrowers are struggling to pay back their loans.

The charity Citizens Advice recently revealed they have seen a tenfold increase in clients looking for help with payday loan debt. Thankfully, new legislation means the Financial Conduct Authority, which begins operating next year, will have powers to set a cap on the astronomical interest rates being charged.

But now some customers are still subjected to rates of more than 4,000 per cent APR. Cash-strapped Brits are also being targeted by devious loan companies with offers of easy cash for Christmas.

The industry is even targeting borrowers with a special app for handheld devices. It tempts punters with offers of “Instant cash” at the touch of a button.

Today we reveal the massive debt that can quickly mount up after borrowing relatively small sums.

Here, three borrowers talk about their horrendous experiences after getting into payday loan debt, and we tell how some loan firms can quickly turn nasty if payments are missed.

We asked the companies for a response but did not receive one.

We also round up the most extortionate interest rates being charged by payday loan companies.


CUSTOMER service assistant Luke Martin (main image) was just 18 when he took out his first payday loan.

He says: “It was in 2008 and I was already £2,000 in debt with my bank.

“Incredibly, Payday Express wired me £150 like it was free money. Initially I borrowed it so I could pay my car insurance and still afford to buy Christmas presents for my loved ones.

“I was working in a bowling alley and struggling to make ends meet. The following month I couldn’t afford to pay back the outstanding balance, so I just cleared the interest.

“It rolled over every month and by June 2009 I was borrowing from several other lenders to pay the interest.

“I took out a loan with QuickQuid to pay off the original loan. I then took another payday loan to pay off QuickQuid, and so it went on and on.”

Luke, 22, who lives with his parents in south London, adds: “I took out loans with 20 payday companies.

“My original loan went up to £10,000 with interest and default charges.

“Before I knew it, I was up to my eyeballs in debt. Despite my age and naivety, the lenders showed no compassion.

“I desperately tried to arrange a repayment plan based on my earnings so I could pay back an affordable amount each month. But whatever I suggested they demanded double.

At my wits’ end, I had no choice but to pawn my belongings.

“My parents wondered why I was always ‘losing’ my phone and why I’d suddenly lost interest with my games console and computer. The truth was I’d sold everything apart from the clothes on my back but I didn’t want them to know. By early 2010, things had turned really ugly. I was borrowing from Payday Express, QuickQuid, Wonga, Cash Genie, 247Moneybox, Speedy Dosh and Mobile Quid, to name a few.

“Every day I’d receive dozens of threatening emails, phone calls and texts. I could no longer hide the truth from my parents as the lenders started calling the house phone ten times a day, asking for me.


What to expect from a £100 loan:

QuickQuid (on “average” rate tier) – Finance charge per period: £29.50. Total amount paid: £129.50. APR: 2,222.46 per cent.

Wonga – FCPP: £22.15. Total amount paid: £122.15. APR: 4,214 per cent.

PaydayUK – FCPP: £29.95. Total amount paid: £129.95. APR: 2,090 per cent.

Payday Express – FCPP: £29. Total amount paid: £129. APR: 2,670.8 per cent.

KwikCash: FCPP: £25. Total amount paid: £125. APR: 1,737 per cent.


“My poor mum was terrified they were going to ransack the house or harm me that she couldn’t sleep at night. The guilt was too much and I was signed off work with depression. At times, I felt so low I contemplated suicide.

“Unbelievably, by the age of 20, I had two County Court Judgements for debt under my belt and I owed £6,000. In August this year, I received another CCJ on a £150 loan. I’ve been ordered to pay £3,500 back through a repayment scheme.

“I’m in nearly £10,000 of debt and realise that with my credit rating it’s unlikely I’ll ever be able to get legitimate credit again or a mortgage.

“The Government banned cigarette advertising, yet it allows payday companies such as Wonga, who swamp youth media with powerful advertising campaigns.

“If I’d known then what I know now, I would never have got involved with payday loans. They’ve ruined my life.”


Sarah Craggs, 19

Cash-strapped … Sarah Craggs has to pay £140 a month to clear her debts

peter powell

SARAH CRAGGS, 19, a nursery practitioner who lives with her parents in Liverpool, borrowed £300 and now owes £1,500. She said:

“I am dreading the festive season, knowing I can barely afford to eat. Stupidly, in November last year, I borrowed £300 from Wonga. I was working part-time on a minimum wage and stressing out about buying presents.

I was made redundant in December 2011. I ended up buying around £1,225 worth of goods on interest-free repayments from a catalogue company.

Then, to my horror, Wonga were calling and texting – reminding me my repayment was due… They demanded I found the funds in two weeks.

I was terrified bailiffs were going to come and take my family’s belongings so I contacted a debt management company, who said I owed around £3,500 in total to Wonga and the catalogue company.For the foreseeable future I will be paying them £140 a month for their help.

I hope the Government clamps down on payday companies like these.”


Sandra Hopkins, 34

Christmas fear … Sandra Hopkins now owes £3,500 after taking out £100 loan last year

D Legakis Photography/athena

SANDRA HOPKINS, 34, is a personal trainer, who lives with her parents in Swansea. She borrowed £100 and now owes £3,500. She said:

“Last Christmas, I resorted to a Payday UK loan to buy presents. A few weeks after I got the money, I contacted them to pay it off. But a representative told me just to pay the £25 interest and offered me more credit. I’d just borrowed another £350 and hadn’t even paid the existing balance owed.

As the weeks rolled into the New Year, Payday UK kept calling and texting me, encouraging me to pay the interest and leave the balance.

I took out another loan of £400 with QuickQuid to pay off the first payday loan. But then I ended up not being able to pay off QuickQuid so started borrowing from other firms.

By now some of the loans I had taken out had interest rates as high as 4,214 per cent.

Terrified, I’d cry myself to sleep. I contacted a debt relief company. They consolidated all my debts and set up a repayment plan.”


[…]

Obama, 'Solyndra' Players Raise Cash

SAN FRANCISCO — At an exclusive re-election fundraiser tonight, President Obama hobnobbed with 60 of his wealthiest supporters, including two figures at the center of the Solyndra loan controversy.

Steve Westly, a Silicon Valley venture capitalist, was one of the first to raise red flags about the administration’s support for a $500 million loan to Solyndra, the solar energy start-up that later went bankrupt. ; He wrote directly to senior Obama adviser Valerie Jarrett in 2010 to raise concerns about the company’s viability ahead of the president’s high-profile visit that year.

Matt Rogers, a former senior adviser at the Department of Energy, played a key role in approving Solyndra’s loan as part of the stimulus plan.

Both men were spotted ;by White House print pool reporter Darren Samuelsohn of Politico at the Piedmont, Calif., home of Quinn Delaney and Wayne Jordan, who were hosting the $35,800-a-head event.

Samuelsohn noted that Westly was seen near the pool “juggling lemons, entertaining kids at the party.”

Republicans have seized on Obama’s ties to Westly and Rogers — and the Solyndra loan — as part of their case that the president engages in “crony capitalism.”

“The Obama Administration betrayed American taxpayers when it dumped hundreds of millions of public dollars into Solyndra while ignoring clear warnings about the company’s dire financial situation,” Romney campaign spokesman Ryan Williams said in a statement.

“President Obama’s first term worked out well for his donors who got special access and taxpayer money for their failed ventures,” Williams said. “It hasn’t worked as well for the 23 million Americans struggling for work in the worst economic recovery our country has ever had.”

Before receiving a fast-tracked loan from the Obama administration in 2010, Solyndra had been singled out by both Republicans and Democrats as a promising venture potentially worthy of government investment. The company first applied for a Department of Energy grant under the George W. Bush administration.

[…]