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Short-Term Loans with Rates Above 1000%!
New Loan Sharks Entering the Payday Predator Waters
A new report offers alarming details about a new competitor in the payday predator market. It appears SoLo Funds is offering peer-to-peer or “community” lending with rates in excess of 1000%. This would make the loans more than double the cost of payday loans — which can carry interest rates of up to 460%.
Loan requests visible on that platform, if calculated on an APR basis, would carry rates reaching as high as 2,555%, owing to the option to borrow for periods of time as short as 3 days — a loan term that is generally not permitted, even in states that allow payday loans.
The Consumer Financial Protection Bureau (CFPB) has issued a warning about Buy Now, Pay Later (BNPL) loan products even as consumers are in the midst of a key shopping season.
Specifically, the CFPB is advising consumers to be aware of fees and of the fact that BNPL products have fewer protections than credit cards.
What about all those payday advance apps?
Adam Hardy writes in Money.com that a number of cash-advance apps are suggesting they offer a viable alternative to payday loans but may instead offer a similar product in a more tech-friendly package.
Hardy reviews the policies and practices of apps such as Dave, Earnin, and Brigit and finds that:
“. . .consumer experts warn their fees are just as bad as — if not worse than — traditional payday loan APRs, with rates that can easily top 300%. And, they say, the apps can actually trigger overdraft fees.”
A warning on Robotexts
Florida’s Attorney General is warning consumers to be aware of robotexts and noting that in some cases, these automated messages contain scam links.
(AG Ashley) Moody’s office has issued a Consumer Alert warning for the “rise of robotexts.” The attorney general’s office said Americans were on track to get about 86 billion automated text messages this year, already having received 71 billion as a nation. The office said five billion of those robotexts went to just Floridians.
In a press release, Moody said:
“These automated text messages are now more prevalent, and potentially more dangerous, than robocalls since malicious links can be clicked on directly in a text.