Internet payday lenders under scrutiny in Georgia
Last week, Georgia Attorney General Sam Olens sued several payday lenders, seeking to stop the lenders from doing business in the state. Here in Georgia, it is illegal to make payday loans under the Pay Day Lending Act.
The companies that have been sued are not licensed to offer loans in Georgia, but are allegedly providing payday loans over the Internet to Georgia residents.
Payday loans can be very problematic for consumers.
The lenders targeted in this lawsuit apparently attach interest rates as high as 340 percent to loans. According to Olens, this means that if a person borrowed $2,600, he or she could end up repaying the lender as much as $14,000.
State agencies have fielded numerous reports about Internet payday lenders. Consumers have reported that one of the defendants in this lawsuit withdraws payments from borrowers’ bank accounts even after the loans have been completely repaid. Another defendant apparently harasses borrowers and threatens wage garnishment.
Olens not only wants to stop these companies from doing business in Georgia, but he has also asked the court to void any existing loans in the state, barring the defendants from collecting the debt.
Many people in and around Atlanta live paycheck to paycheck. Needing just a little more cash to hold one over until payday is common. However, consumers need to be aware that payday loans are generally traps.
Those who need a little more money until payday might be better off asking a friend or family member for a loan, or even asking an employer for an advance. From there, it is wise to come up with a budget in order to stretch the next paycheck further than the last, if possible.
Many people, however, are struggling too much for these options to be of much help. Nonetheless, legitimate debt relief options are available. Those who are struggling with creditor harassment and overwhelming debt should talk to a reputable bankruptcy attorney about their options.
Source: Clayton News Daily, “Olens files suit to protect Georgia consumers from illegal payday lenders,” Kathy Jefcoats, July 31, 2013