Is it That Hard to Find a Good Payday Loan? One Woman Paid $900 in Undisclosed Fees

Following our prison visit in clinic this past week, we promised to report on a brand new (to us) scam, one involving a company that helps people “find” payday lenders. My student Bridget Mullins reports on it here.

One woman I saw at the prison had a question about a predatory lending scheme (if you can call it lending really) that I had never heard of before. She told me that she was looking for a payday loan so she went to a website that offered to find her a good payday loan. At some point she was asked to enter in her bank account info, but she didn’t read the fine print and she didn’t understand that they were actually charging her for this “service.” She never got a payday loan from this company, and it ended up costing her $900 in overdraft fees at her bank.  We have no idea how much the finder charged or how many times they ran these unauthorized fees through, so we tried to find out what might've happened.

When I googled “find a payday loan,” several companies popped up. I followed the most prominent one through its processes. They tell customers to “work with our online lenders to find a payday loan that fits.”  You can’t get to any information about what the “finder” will charge without entering your personal information. In fact, they never disclose that they charge any fees for their services. To use the service, you must complete one or more online forms that request specific information from you, including, but not limited to, your name, address, telephone number, email address, social security number, driver's license number, banking account information, employment information, and personal references. Use of this information is subject to this site's privacy policy and in order to use this web site or the service, you must agree to these terms and conditions as well as the privacy policy, which is incorporated reference.

The one we followed, paydayloanaffiliate.com, says it is not a lender and does not make loans or credit decisions in connection with its loan matching service nor does it guarantee acceptance into any particular loan program or specific loan terms of conditions with any participating lender.  They also do not guarantee that the price, product, availability, rates, fees, or any other loan terms offered and made available by participating lenders through the loan matching service are the best terms available in the market. An undisclosed $900 in fees, with no loan at the end of the rainbow.  This makes actually payday borrowing look cheap!

Comments

[bzhou]

"it ended up costing her $900 in overdraft fees at her bank."

If I am reading this correctly, the finders fee wasn't $900, it was some other nominal amount that lead (in part?) to the $900 bank overdraft fee. So 1) how much was the actual finders fee from the website? and 2)stating the total amount the woman paid as the finders fee is deceptive isn't it?

[Nathalie Martin]

I've changed the description slightly to reflect your comment but I have a question back. Do you think the finder's fees were deceptive?

[bzhou]

It could be, but my judgment on whether the fee was deceptive or not would just be a blind guess without looking at the specific website.