New York returns money to 14,000 payday loan customers
Going to a payday lender can be a good financial decision. That is, if your Attorney General threatens to sue your payday lender, and they settle up, and then you receive your money back.New York Attorney General Andrew M. Cuomo has just announced a $5.2 million settlement with two companies running "payday loan" companies.
Cuomo's office will be sending money to more than 14,000 victims. You may be one of those victims if you live in New York and have ever taken out a small loan with the businesses, Telecash or Cashnet.
If that's the case, and you're now thinking, "Wait a minute, I didn't know about this," well, now you know, and you can call the Attorney General's Help Line at 1-800-771-7755, if you have questions.
People will receive anywhere from $10 to more than $4,500. What victims get will be based on the amount of interest that they paid. You have to fill out a form and presumably offer some sort of proof of your loan, and then you'll get your check. There are a large contingency of consumers in the Bronx and Brooklyn who wound up using Telecash or Cashnet.
For the most part, there aren't a lot of payday loan centers in New York -- due to them not being allowed to offer loans with an interest rate over 16% -- but according to the Attorney General's press release, these two companies, TC Services Corporation (doing business as Telecash) and CRA Services Inc (d/b/a Cashnet) were using a bank in Delaware, County Bank of Rehoboth Beach, Del. to get around the New York laws. That's why the Attorney General's office is referring to this as a "rent a bank" scheme.
I can't help but wonder what customers of County Bank will think when they hear about this, and how this will affect County Bank's reputation.
Delaware doesn't limit the amount of interest on a loan, which is why these payday loan centers were able to charge people over -- hold onto your hat -- 500% interest.
Reader Comments (Page 1 of 1)
11-17-2009 @ 5:02PM
Donald said...
And yet banks can charge 1900% interest on overdrawn checking accounts? How many of us have paid $60. for a $0.25 overdraft. and when you bounce one you bounce several so the real interest rate is more like 10,000% . For 20 bucks I can, correction "COULD HAVE", avoided that HUGE overdraft fee and saved my self 40 bucks.
What about lumber companies that mark up lumber 800% or Governments that charge 100% of the retail price for cigarettes effectively turning a $3.00 pack of smokes into $6.00.
Seems like nothing more than politics. Attack the easy targets, forget the hard ones like banks. Politicians know who pads their pockets. Scumbags.
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11-20-2009 @ 7:45AM
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11-30-2009 @ 4:38AM
Matt said...
payday loan is the best choice, if you are in need of a small amount for a short duration. Payday loans do not work in the same way as other loans, and instead of an interest rate they charge a one off rate that is dependent on the amount you borrow and how long you borrow it for.
Matt
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