The Federal Trade Commission, the nation’s consumer protection agency, issued an instruction on how to chose a loan in a smart way.
Online payday loan has become an easy alternative for every individual in need but based on complaints and reports, it is full of threats, fraud and unauthorized withdrawals. These are the words explained in the report of the Pew Charitable Trusts which was released after the federal regulators’ recent actions towards the fraudulent online payday lenders.
Generally, payday loans are small and short-term loans yet the interest is so high. In the past, payday lenders were operating in storefronts but with the advancement of technology, the loans are offered through the Internet. Statistics showed, about one-third have originated online. Also, in the report, it showed that the borrowers of online payday loans are younger, have higher incomes and more educated compared to the storefront borrowers. However, resorting to online lenders proved to be more troublesome than the physical lending stores since 90% of the payday loans’ complaints are addressed to the online lenders.
The report showed that one-third of the online borrowers are threatened by the debt collector or lender like threats to contact their families, employers or friends or they will be arrested if they cannot pay on time. These harassments to borrowers are illegal according to the laws of federal debt collection. For this reason, it is very important for online borrowers to look for reputable and big lenders like the QuickQuid online payday loan. You can tell that the lender is reputable by reading reviews to tell how they operate and if their policies are governed by laws.