Home Scam/Fraud Predatory Payday Loan Companies and Fraudsters Thrive Among Uneven Laws and Stolen...

Predatory Payday Loan Companies and Fraudsters Thrive Among Uneven Laws and Stolen Data, New BBB Study Finds

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As consumers lost jobs and struggled to make ends meet during the COVID-19 pandemic, many turned to payday loans and other short-term solutions, with an increase in online solutions. This not only allowed predatory lenders to thrive – many borrowers still contend with sky-high interest rates and opaque fees – but also created a fertile environment for scammers, according to a new in-depth investigative study by Better Business Bureau (BBB).

Payday loan laws are handled on a state-to-state basis among the 32 states in which they are available, and a complicated web of regulations makes the impact of the industry in the U.S. and Canada tough to track. The BBB study finds one common thread, however, in the triple-digit interest rates many of these loans carry – camouflaged by interest that is compounded weekly or monthly, rather than annually, along with significant rollover fees.

From 2019 to July 2022, BBB received nearly…

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