Internet payday loans are illegal in the state of Virginia. Many other forms of internet loans violate Virginia’s usury cap, because they aren’t exempted from the law. The VaPERL Coalition stands with Senator Merkley, and others who filed the 2013 SAFE Lending Act in order to combat internet lenders and others from shamelessly skirting state lending laws.  Also on the horizon are bank payday loans, that while they are not yet here in Virginia, may pose a new more sinister threat to Virginia borrowers – control of their bank accounts without recourse. Current internet payday loans, internet installment loans, internet line of credit loans, and bank payday loan products all do or would violate Virginia law if made to Virginia residents. We applaud the efforts to give states who have serious lending laws the Federal support to enforce them. Read the press release on this issue by coalition member, the Virginia Poverty Law Center.

The SAFE Lending Act is a bill filed by U.S. Senators Merkley, Durbin, Blumenthal, and Udall and would ensure that all lenders are playing by the same rules by:

• Requiring all online small-dollar lenders (such as payday lenders) to comply with state law if it provides better consumer protections than federal law;

• Preventing banks from making payday loans in violation of the state law where the consumer resides;

• Providing new federal enforcement measures to protect consumers from online payday lenders that seek to evade state consumer protection laws, such as by locating their businesses off-shore, or affiliating with a Native American Tribe and claiming the right to assert the tribe’s sovereign immunity; and

• Empowering Native American Tribes to enlist the help of the CFPB where needed to protect their members from abusive payday lending on the reservation, and respecting tribal laws that provide stronger consumer protections than are available under state law.

The SAFE Lending Act would also protect consumers’ bank accounts by:

• Closing the single payment loophole in the Electronic Fund Transfer Act and ensure that consumers have control over how lenders access their bank accounts for payment and collections of high-cost loans;

• Safeguarding consumers’ personal information by banning “lead generators” who collect information like Social Security numbers, income and bank account information; and

• Prohibiting lenders from using a borrower’s bank account numbers to create unsigned checks used to withdraw funds, even when consumers have opted out of making payments electronically.

RICHMOND, VA (WWBT) -

Local consumer advocates are warning about an online payday loan company targeting the public. Tom Gallagher, with the Richmond Better Business Bureau, is sounding the alarm. The organization is suspicious about an online payday loan company called Qxlonline.

“The very first thing they ask you, go right to their splash page and before anything, they want your social security number and some other personal information,” Gallagher said.

The company has an “F” rating with the BBB. Gallagher says attempts to reach anyone with Qxlonline has been unsuccessful. There have been at least five complaints in Virginia. They include threatening collection calls about loans consumers say they never applied for — and the company obtaining personal information then locking customers out of the website.

“This is really tragic because the victims in these things are just desperate,” said Gallagher.

He says there have been over 600 inquires about the company. Gallagher says a big problem, no one seems to know where the company is located. Victims have reported the company could be located in Pakistan and Australia.

“Wherever it is, you don’t want to be doing business with these people. It is an advance fee loan operation - an advance fee loan online is illegal in Virginia,” Gallagher told us.

On the website, there is no email or address information, only a phone number. We called and all you get is an automated message asking for your social security number. The BBB is not only consumer organization warning about Qxlonline - Dana Wiggins, with the Virginia Poverty Law Center and Virginia Partnership to Encourage Responsible Lending, says consumers should stay away from any company offering online payday loans.

“Bottom line people need to understand that online payday loans are not an easy road to money, they are and easy road to get scammed,” she said.

Beware: Online Payday Loan Traps

See the full story and watch the video

Get help if you are stuck in an internet payday loan

Jul 24, 2012 (Bloomberg)

The Internet’s “don’t-call-us- payday” lenders are making a bid for more respect in Washingtonand less control from state regulators.

Firms offering short-term online loans, including Fort Worth, Texas-based Cash America International Inc. (CSH), are ramping up political contributions, hiring lobbyists and asking Congress to largely transfer oversight from states to the U.S. Office of the Comptroller of the Currency. A House committee today will hold a hearing on the proposal, which the OCC itself opposes.

As the $11 billion online loan industry bulks up in Washington, it also aims to shed the “payday lenders” label, according to talking points drafted by Peter Barden, a spokesman for the Online Lenders Alliance.

The memo advised lenders making lobbying visits to Capitol Hill this summer to “avoid using the term ’payday.’ Talk about short-term, small-dollar lending.”

Behind it all is more spending. The political action committee for Cash America is on pace to double its annual campaign contributions from the $200,000 it gave in 2007, according to federal election records, and the lender is bankrolling a new coalition to push for the legislation.

The core of the bill, sponsored by Representatives Blaine Luetkemeyer, a Missouri Republican, and Joe Baca, a California Democrat, would give the OCC authority to designate lenders as National Consumer Credit Corporations and require the regulator to treat storefront and online lenders equally.

Read the Full Story

Americans spend $7.4 billion per year on payday loans, including an average of $520 in interest per borrower for eight $375 loans or extensions. The Pew Charitable Trusts establishes a new understanding of borrowers and their needs in Payday Lending in America: Who Borrows, Where They Borrow, and Why.

1. You sign away your right to keep your personal information private, even if you only apply for a loan.
• Many borrowers only realize after the fact that once you put your name address phone number social security number and employment information into the form of an internet lender, it is sold, usually multiple times, to both other lenders and scammers.  Some borrowers end out getting deposits into their account they did not know about (not from the lender they borrowed from) or think they requested, only to then have much more money get taken out on subsequent paydays, without the ability to simply give back the money if they didn’t want it.
• Many online lenders have weak security and safeguards to prevent hackers from getting borrower information. Many also do not put in place sufficient safeguards to prevent scammers and fake debt collectors from purchasing your information for the purpose of extorting money from the borrower later; in some cases several years later.  See a related article. The FTC has been cracking down on such scams, a good reason to always file complaints with them, but more keep replacing the ones caught, ever tweaking their scams.
2. You give the lender electronic access to your bank account for a payday loan. ACH withdrawals are prohibited under Virginia law for both in-store and online payday loans, even if they are not licensed with the state.
• This ACH authorization is easy to give, but hard to take away. Many lenders do not honor people’s requests to withdraw ACH authorization, and some banks and credit unions are not honoring borrower’s decisions to revoke authorization. This makes it harder to get control back over your account and over the money deposited into it later. Sadly, many borrowers are forced to leave the banks or credit unions that they had accounts with in order to finally escape online lenders and scammers.
3. Not every fast cash loan on the internet is a online payday loan.
• You may think you are getting a regular payday loan over the internet, but there are many “installment” lenders and “line of credit” who appear to be a payday loan, but whose loan products and their business practices can differ from payday lenders. For example, borrowers at one installment lender think they are borrowing $1500, but the company takes $500 “off the top” as a loan fee on top of the enormous interest fees, so that the borrower actually gets $1000 in hand but ends out paying back a loan on $1500.

Stuck in an Internet Payday Loan? See the steps you need to take to be free.

Photo: © Bivni | Stock Free Images & Dreamstime Stock Photos