Seriously, Rise Credit?
Why the companies of Elevate are terrible, horrible, no good, very bad lenders
Studies on American financial health indicate that most Americans are ill-prepared for an emergency costing more than $1000. These numbers, reported by Fortunly, tell a grim tale:
American savings statistics for 2020 show that nearly 70% of Americans have less than $1,000 stashed away in their bank accounts. That number rose from 58% in 2018. Meanwhile, the number of those with savings between $1,000 and $5,000 stands at roughly 12%.
It’s not difficult to imagine an emergency costing more than $1000. A trip to the ER, even with health insurance, can easily cost $1000 or more in order to meet your policy’s deductible. A flat tire won’t likely run you $1000, but other car repairs just might. What about a busted water heater or a washer/dryer going out? If you have less than $1000 in the bank, all of these situations could spell financial crisis.
This could mean it is time to consider a short-term loan to bridge the gap between your finances and the emergency expense.
If you’ve decided a loan is the right answer right now, you may be wondering where to turn.
One option that may come up is a loan from Rise Credit. The company specializes in short-term loans with repayment terms from 7 to 26 months. They note on their website that if you make on-time payments, they’ll lower your interest rate over time. So, a relatively long repayment option plus rates that get lower if you pay as planned.
Sounds good, right?
Well, not so much.
Here’s a bit more about the Rise experience from their website:
In my state of Tennessee, Rise offers short-term loans from $500 to $5000 with interest rates ranging from 99% to 149%.
They offer an example loan of $2000 with a biweekly payment of $150 over 13 months. That means you’d end up paying $3900. Yes, that short-term fix of $2000 could cost you another $1900. Oh my!
This Company has Elevated the Art of Scamming Borrowers
Loans with rates as high as 251%.
Read that again.
No, this is NOT the shady payday lending store located in a crappy strip mall.
Instead, it’s a so-called “FinTech” lender named Elevate. The company operates a number of branded credit products — short-term or installment loans offered entirely online.
These products include Rise, Elastic, and the Today card Mastercard.
Here’s what they say about their work on their website:
Now more than ever there is a need to rethink traditional approaches to consumer credit. Decades–long macroeconomic trends and the recent financial crisis have resulted in a growing “New Middle Class” with little to no savings, urgent credit needs and limited options. Banks haven’t stepped up to serve this market and legacy non-prime lenders haven’t innovated. We believe Elevate’s solutions provide the answer and are transforming the non-prime lending industry in the US by providing responsible and transparent options.
Sounds great, right? Using technology to cut costs and deliver a needed product to the “new middle class.” Plus, they even tell us they are “transparent” and “responsible.”
Turns out, not so much.
Several recent stories raise serious questions about the relative transparency and responsibility of Elevate’s business model. I mean, if you think that charging triple-digit interest rates and deliberately violating state lending laws is transparent and responsible, Elevate just might be for you.
Here’s how the Dallas Business Journal describes one recent settlement involving Elevate and a scheme to evade state caps on short-term loan interest rates:
Fort Worth technology-based financial lender Elevate Credit has agreed to pay $33 million as part of a proposed settlement agreement related to a web of litigation across the United States, which alleged a decade-long scheme of predatory lending and subsequent corporate transactional legal maneuvering that victimized more than a million low-income people.
ANOTHER Elevate-affiliated Company Ripping People Off
Virginia consumers who borrowed from online payday lender Think Finance (a precursor company to Elevate) could soon see cash refunds as a result of a proposed settlement in a class action lawsuit. Details from the case suggest Think Finance ran loans through three tribal lenders in an attempt to evade state interest rate caps and charge triple-digit interest rates on payday loans.
The class of Virginia residents sued the founders of Think Finance in 2018 for allegedly using tribe-owned lending companies Plain Green LLC, Great Plains Lending LLC and MobiLoans LLC as fronts to skirt state usury laws, which prohibit lenders from charging excessively high interest rates.
The proposed settlement will result in a settlement fund paid by Think Finance in the amount of $44.5 million.
Despite all the bad press, scams, and lawsuit settlements, these predators are still out there in suits getting rich as hell on the backs of working people with little to no savings.