Castle Law Office Blog | Missouri & Illinois Bankruptcy Legal Blog

Beware of Online Borrowing

If you are seeking some extra money for the holiday season, the federal government is warning that it is risky to borrow from an Internet payday lender.

One site in particular has been closed in on by the Federal Trade Commission, www.cash2day4u.com. The site’s operators offered loans of up to $500 or less to consumers within 24 hours with no requirements of a credit check, proof of income, or other documentation.

Customers applying for a loan through the site were required to provide their bank account and Social Security numbers. However, there was a catch that the fees for the service ranged from $35 to $80 and if customers were unable to make payments, the lenders would be allowed to go into the customer’s bank account.

In the FTC complaint, the operators were charged with not disclosing in writing the annual percentage rate, payment schedule, amount financed, total number of payments and any late fees. Consumers complained that they were made to overpay their accounts and were required to close their bank accounts.

The FTC reported that many of the consumers had received “abusive and deceptive” collection calls from the operators aimed at regaining access to their accounts. They falsely threatened customers with arrests, lawsuits, seizure of property, or wage garnishment and called consumers, coworkers, and employers at their workplace numerous times using abusive language and disclosing the purported debts of consumers.

Unfortunately, I see honest, hard working people taken advantage of by the credit industry on a routine basis.  Payday lenders are the last possible place you should look to when in need of some cash.  In many cases, I have seen loan documents showing 400-500% annual interest rates on these short term loans.  Although they accept a post-dated check from you, when you don't pay, they try to cash the check and if it bounces, they will try to prosecute you and send you to jail.

If you find yourself struggling to keep up with your debt, I know it's tempting to get a quick payday loan.  I mean, what can it hurt, right?  Well, I think you can see from the information here how bad these are for you.  To find out additional things your creditors don't want you to know, I have written the consumer guide on the bankruptcy process so that the average, hard working family can get the information they need to make an informed decision.  My guide, "7 Critical Mistakes To Avoid The Dismissal Of Your Bankruptcy Case" is yours FREE by clicking on the title or calling toll free 1-866-570-8484.

St. Louis, Missouri bankruptcy attorney and Illinois bankruptcy lawyer James Brown of Castle Law Group has spent more than 14 years helping families file for chapter 7 bankruptcy and chapter 13 bankruptcy to stop the foreclosure of their home, repossession of their car and garnishment of wages.