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WJTV INVESTIGATES: Payday Loan Company Allegedly Trapping Customers In Debt

From
cash loan – Yahoo News Search Results:

Payday loans and cash advances may sound like a good idea when you’re strapped for cash, but if you’re not careful, they could land you in a world financial trouble. It’s no secret that payday loans are known for their extraordinarily high interest rates.<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /?>

It’s become such a problem that payday loan businesses have been outlawed in 18 states. Currently, the Consumer Federation of America lists the 32 other states, including Mississippi, where high cost payday lending is legal.

According to Mississippi code, payday Lenders can loan up to $500.00 per check, with a term of 30 days, at $20.00-$22.00 in finance charges per $100.00 borrowed.

The finance charge is the same for short-term, 14-day loans, however the APR on those loans is 500 times the original amount of the loan.

Jerry Wilson, Commissioner of the Mississippi Department of Banking and Consumer Finance says that the Payday industry is quote “pretty good about following the law.”

However recent complaints have sparked an investigation by the department into one payday company in particular, All American Check Cashing Inc., which has 51 locations statewide.

It’s prompted the DBCF to order a cease and desist order against All American’s Monthly Lending Program for illegal and unethical practice, alleging the program instructs employees to only accept the interest on a delayed deposit check and further telling employees to illegally roll a check during the middle of each month.

The DBCF claims that All American has been holding the checks of customers who could not pay off their loan debt by the deadline, having them sign up to pay an additional fee, only to later cash their original check.

Tameka Fletcher has used payday loans before to get her through a tight spot, and recalls her own experience with payday lending businesses. She said, “I paid the money along with my interest and got back the next day and realized that they had already cashed a check that I wrote them two weeks before, and I had paid them when I came in to pay it.”

According to the cease and desist order, All American’s monthly lending program focuses on customers who “only receive one income payment per month. This includes those customers receiving one payment (on the 1st or 3rd of each month) from a government benefit program such as Social Security, Medicaid, etc.”

So what does All American Check Cashing have to say about this?

Owner Michael Gray could not be reached for comment, but according to Commissioner Jerry Wilson, his examiners were denied access to All American’s customer files and business records for two days when they asked for them- something Wilson says is unheard of and totally against the law.

We also reached out to Dale Danks Jr., The attorney representing All American, who declined to talk to us, but is quoted in the Clarion Ledger saying, “All American has a policy against accepting a fee only, so if the investigation proves that this was occurring in some locations, All American will do whatever it needs to do to correct that issue.”

If All American Check Cashing Inc. is found to be in violation of the Mississippi Check Cashers Act, the company could lose its license or face a fine.

As for consumers, State Attorney General Jim Hood says people should first try taking out a small loan at a bank. However, the problem still remains, most people that use payday loans don’t have good enough credit to qualify for a small bank loan in the first place.

Attorney General Hood says, “Unfortunately, this industry is working on the poor folks that can’t afford to go to those types of institutions.”

So perhaps the message here is to just say no to Payday loans.

Read more:
WJTV INVESTIGATES: Payday Loan Company Allegedly Trapping Customers In Debt

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