The Attorney General’s office in San Francisco worked diligently to distribute settlement money to those involved in a payday loan scam from five years ago. It was a tough job for them to give out the money since it had very little to go by in order to find them The office had to rely on people calling them and proving they had used payday loans for fast cash with the those lenders during that time period. In the news now is a credit card needed to settle with customers.
Discover will be refunding $200 million in charges which they tricked customers into paying. More than 3.5 million users will have charges refunded. Discover card will also have to pay $14 million in civil penalties as part of their settlement with the court.
The Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau both investigated the charges that Discover used telemarketers to mislead customers into purchasing four additional services for the credit card: payment protection, credit score tracking, identity theft protection and wallet protection. The fast talking telemarketers omitted revealing the actual costs for these services and avoided discussing eligibility requirements. Some of the marketers even charged some of the consumers without getting the proper consent.
Discover is not alone. Capital One also recently settled a lawsuit for using aggressive marketing tactics to get consumers to purchase add-ons.
As big as banks and financial institutions are in this country, they will not go without prosecution if they abuse consumer rights. Our nation’s government whether national, state or local are set up with regulations and programs to oversee that the consumers stay safe. Banks and credit unions have taken up offering payday loans to compete with direct payday loan lenders. Consumers need to be cautious when taking out payday loans with their bank. Banks and credit unions do not have to follow the state regulations for payday loans. Interest rates are still set high but defaulting on a payday loan through a bank could put your checking account at risk of being frozen or have automatic deductions placing other payments at risk.
Stepped-up enforcement of the Consumer Financial Protection Bureau addresses these issues and has plans to continue investigating financial institutions.
Payday loan regulations are constantly being addressed by state governments.
There are legislative regulations in process within many different states. The high interest and amount of loan continue to be a focal point of these regulations. This is the government’s way of protecting their residents from falling further into debt. Those opposing new caps have won many battles, but determined forces behind the litigation come back each year to try again.
New ways to gain revenue will continue to evolve as financial industries need to make up for lost revenue. It is understandable from the aspect behind the financiers that money drives their company, but there also needs to be honesty, integrity and use best practices with customers. It isn’t just the payday loan industry which carries bad apples, but they tend to receive the harshest slandering words. Spotya! Online Payday Loans works hard to prove to its present and potential customers that there are good apples in the bunch.
