Author Archives: Sara Miller

Avoid unlicensed payday lenders

Consumers have been warned by the Washington State Department of Financial Institutions

unlicensed payday lenders

Unlicensed payday lenders

(DFI) to verify the license of the lender before taking a payday loan or providing personal information.

The DFI received a complaint about lenders calling frequently at odd hours and threatening borrowers with legal action. They claimed that they were not subject to the DFI’s regulations because they were tribal online payday lenders. They said they were only subject to federal government regulations.

As the lenders were not licensed by the DFI, they were not permitted to do business in Washington State. A small loan provided by an unlicensed entity to a person who is physically located in Washington cannot be enforced or collected in Washington State.

How to verify a lender’s license

The DFI strongly recommends that before taking a loan you need to verify the license of the lender at

Report loan scams

If you are a resident of Washington State, you can report a payday loan scam at 1-877-RING DFI (746-4334) or at If you live in another state, you can follow this link to search for your state’s regulator:

You can report a payday loan scam to the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357) or at You can also contact the Consumer Financial Protection Bureau (CFPB) at (855) 411-CFPB (2372) or at

If you have provided personal information to scammers, you need to take suitable precautions. You will find more information about identity theft at

You can report a loan scam that involves the Internet to the FBI’s Internet Crime Complaint Center at

If you are the victim of a loan scam and are worried your personal financial details being misused, you need to contact your bank and the three main credit bureaus.

* Indicates number of rounds of checking / editing / polishing

How to avoid the debt collection scam

avoid the debt collection scam

Avoid the debt collection scam

The Washington State Department of Financial Institutavoid the debt collection scamions (DFI) was informed that a company was contacting consumers by telephone and asking them to repay payday loan debts allegedly owed by them.

A consumer said she was contacted by the company and asked to pay immediately to avoid legal action. The caller did not provide any information to substantiate the claims and the consumer refused to pay. The company was not licensed to operate as a payday lender or collections agent.

How to verify a lender’s license

If you are a resident of Washington State, you can verify the license of a lender at

Know about debt collection rules

Debt collection activities are governed by the Fair Debt Collection Practices Act. To find out more about debt collection laws, you can contact the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357) or at

How to report a loan scam

If you are a resident of Washington State, you can report a payday loan scam to the DFI at 1-877-RING DFI (746-4334) or at If you live in another state, you can follow this link to find your state’s regulator:

You can report a loan scam to the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357) or at You can also contact the Consumer Financial Protection Bureau (CFPB) at (855) 411-CFPB (2372) or at

If you have provided personal information to scammers, you need to take suitable precautions. You can find out more about identity theft at

To report a loan scam that involves the Internet, you can contact the FBI’s Internet Crime Complaint Center at

If you are the victim of a loan scam and are worried about your personal financial details being misused, you need to contact the three main credit bureaus and your bank.

* Indicates number of rounds of checking / editing / polishing

Watch out for the advance fee loan scam

advance fee loan scam

Advance fee loan scam

The Washington State Department of Financial Institutions (DFI) has warned consumers to check the license the lender before taking a loan or providing any personal information.

A consumer reported that a lender asked her to make an advance payment to get a loan. When she paid the fee, the lender asked her to pay additional fees. This cycle continued until she had paid thousands of dollars. Eventually, she did not receive the loan that was promised or a refund.

Deal only with licensed lenders

The DFI strongly recommends that consumers should deal only with licensed lenders. Residents of Washington State can verify the license of a lender at


How to report a loan scam

If you are a resident of Washington State, you can report a loan scam at 1-877-RING DFI (746-4334) or at If you are a resident of another state, you can follow this link to find your state’s regulator:


You can contact the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357) or at You can also contact the Consumer Financial Protection Bureau (CFPB) at (855) 411-CFPB (2372) or at


To report a loan scam that involves the Internet, you can contact the FBI’s Internet Crime Complaint Center at


If you have provided personal information to scammers, you need to take suitable precautions. You can find out more about identity theft at


If you are the victim of a loan scam and are worried about your personal financial details being misused, you need to contact the three main credit bureaus as well as your bank.

Online payday lenders to settle with FTC

payday online scam

Online payday lenders

The Federal Trade Commission (FTC) accused online payday lenders SFS and Red Cedar Services of asking consumers to pay inflated fees. The lenders settled the FTCs charges regarding illegal fees. They agreed to pay $2.2 million each and jointly waived $68 million in fees that had not been collected.

So far the FTC has recovered around $25.5 million linked to the case involving SFS, Red Cedar Services, MNE Services, AMG Services and several related individuals and entities.

Around $353 million in debt has also been waived, making this the biggest recovery by the FTC in a payday lending case. Litigation is still ongoing against other defendants.

According to Jessica Rich, Director of the Bureau of Consumer Protection, the lenders are paying a high price for deceiving borrowers and asking them to make extra payments. The lenders and others had misrepresented the cost consumers would have to pay for the loans, violating the FTC Act.

They did not accurately reveal the annual percentage rate and other terms of the loan, violating the Truth in Lending Act (TILA). They also violated the Electronic Funds Transfer Act (EFTA) by making pre-authorized debits from the bank accounts of consumers.

The federal court found that the loan documents were deceptive and they violated the Truth in Lending Act (TILA), as alleged by the FTC. It passed orders prohibiting SFS and Red Cedar Services from misrepresenting the terms of loan products. The defendants were also barred from violating the EFTA and TILA.

The aim of the Federal Trade Commission (FTC) is to educate and protect consumers and to encourage competition. To find out more about your rights as a consumer or to file a consumer complaint, you can contact the FTC at 1-877-FTC-HELP (1-877-382-4357) or at

* Indicates number of rounds of checking / editing / polishing

F1 team also needs a cash advance?

Yes, there are times when an F1 team also needs a cash advance. An F1 team could face a cash shortfall in months when income is low and expenses are high.

According to Monisha Kaltenborn, Sauber followed Force India and asked Bernie Ecclestone for a cash advance on its Formula 1 championship payments to prevent its competitor from getting an edge.

cash advance f1 team

F1 Team Need Cash Advance?

The request was made by Force India in October and it is thought to have been accepted. Sauber and Manor did the same when they became aware of it.

The other teams will have to give their unanimous consent before Ecclestone can facilitate the requests.

Sauber team leader Kaltenborn said to Autosport that they saw some of their competitors had asked for a cash advance, which could provide a direct competitive edge. They felt it would certainly make their lives easier, so they did it.

If they could improve their liquidity, it would certainly help the firm. They were not in a position where they could say that it made no difference at all.

Monthly payments are received by teams from Formula One Management on the basis of their historic status as well as their constructors’ championship position in the last season.

These payments are made from February to November, resulting in a shortfall of cash in December and January when important production occurs.

According to Kaltenborn, they are coming close to a time when costs are very high and there is no income from FOM, a major income source for teams.

She said she was confident that Sauber’s request would be accepted. She didn’t see why anyone would oppose it since other teams had received it. It would not be nice if one team suddenly refused for no reason.

Stop Unscrupulous and Illegal Debt Collection – Action Taken

Finally! The Federal Trade Commission (FTC) and other Federal, State and Local authorities have pooled their resources in a move to stop unscrupulous and illegal debt collection!

The FTC published in its webpage ( a sample letter issued by a rogue collection agency to pressure people, during these times of recession and economic difficulties, into paying a debt that they did not owe.

Presuppose you receive a letter like this, how would you feel:

debt collection was put to a stop ftc

“This is the Civil Investigations Unit. We are contacting you in regards to a complaint being
filed against you, pursuant to claim and affidavit number D00D-2932, where you have been named a respondent in a court action and must appear… Please forward this information to your attorney in that the order to show cause contains a restraining order. You or your attorney will have 24 to 48 hours to oppose this matter… Call 757-555-1234.”

The culprit company, Pinnacle Payment Services used different kinds of dirty tactics including posing as an affiliate of a law enforcement company by using fictitious business names. The Judge ordered that Pinnacle be permanently banned from debt collection or any business that has something to do with debts. They were also fined more than $9,000,000.00.

Illegal debt collection activities are now a priority to the FTC. FTC has expressed a desire to partner with collection agencies to make sure that their practices conform to what is acceptable, legal, and fair. There have been filed over 30 new law enforcement actions bringing to over a hundred the number of actions taken against rip-off artists, scammers and fraudulent and abusive debt collectors.

threat phone calls from debt collectorsIt is time for the consumer to hit back! No more sleepless nights! Identify them, know their dirty little tactics, gather evidence, and with the help of the FTC, sue them, fight back and get paid! Every consumer deserves to be respected, and no collector may violate his rights nor demean his character and none of them may hinder a consumer’s lifestyle nor harass or threaten them into paying.

With the FTC’s Edith Ramirez, Illinois Attorney General Lisa Madigan, New York’s Attorney General, the National Registry and Minnesota Commerce Department Commissioner’s Mike Rothman taking the initiative in a move called Operation Collection Protection Initiative, over 70 enforcement partners will collaborate with victims of collection harassment to stop scam operators and other illegal collection practices.

These practices may include one or more of the following:

  1. Disrespectful or Harassing phone calls
  2. False threats of litigation, arrest and wage garnishments
  3. Impersonating attorneys, court employees, process servers, policemen
  4. Using fake debts or debts the consumer does not owe, to harass
  5. Unlawfully disclosing debt information to third parties thereby embarrassing the debtor
  6. Not giving the consumer details of the debts or a chance to verify on his own the correctness of the subject amount.
  7. Threatening suspension of driver’s licenses, confiscation of one’s properties, litigation, and imprisonment

A lot of consumers pay up in order to avoid embarrassment because they get scared or simply because they want peace of mind.

These threats may come from illicit as well as legitimate creditors for even legitimate creditors sometimes resort to unfair misrepresentation, illegal use of loan information, failure to disclose material facts about their financial products like loans, credit assistance, and debt relief.

With FTC’s efforts, consumers may yet feel relaxed knowing that they are being protected from these illegal collectors.

Cash Advance Fee – Scam Alert

Cash Advance Fee - Scam AlertBy the passing day, increasing number of reports regarding loan scams have been received by the Washington State Department of Financial Institutions (DFI). These scams are being conducted by certain people who are claiming to be representatives of firms such as Cash Advance America, Advance America Payday Loans, and Advance America.

How does it work?

A large number of consumers have been the recipients to a lot of phone calls from various people who call and claim to be representatives of these 3 major firms. When consumers receive these scam phone calls, the callers usually offer them loans and borrowings in an exchange for a free, to be paid up front.

In these scam phone calls, customers usually claim to never have applied for any such payday loan amounts, and the callers are insisting that they have been calling in order to discuss the online payday loan applications of these consumers.

Angry woman during mobile phone call payday scamAs reported by one of the consumers, as soon as she refused to transfer the money to the scam caller, she received a threat that legal action would be taken against her. Some of the consumers, who actually made the payment of the upfront fee, did not receive any loan as was promised by the callers. Such loan offers were also made via email to most of the consumers.

In addition to this, a consumer from Washington received a multitude of harassment calls from someone who claimed to be a representative of Cash Advance America. This particular caller said that the consumer owed the company a debt of a payday loan for the year 2007 and turned down the request to provide any further details pertaining to the debt. And the consumer said that he did not borrow any such loan in the past.

Advance America Payday Loans and Cash Advance America use the contact information that is mentioned below. But the Washington State of Department of Financial Institutions has not licensed these two companies to provide loans or do any business in Washington.

Email Addresses,,

Phone Numbers

818-570-6222, 321-576-1077, 206-855-3292, 315-625-1913, 716-240-0028, 254-212-1137, 707-533-1466, 360-362-5979, 206-973-2544

Advance America is, however, licensed to provide loans. But this company that is licensed is not a part of the scams that have been mentioned above.

Recommended Solutions

DFI is recommending consumers to deal with only lenders that are licensed properly to conduct any business, and one way for consumers to determine if lenders are in fact licensed properly is by using a feature on the DFI website that reads Verify a License.

If consumers have any queries about laws pertaining to debt collection, they are advised to contact the Federal Trade Commission.

One thing to note is that debt collectors are not authorized to state that it is a crime if you fail to repay a debt.  Also, they cannot place calls before 8am or after 9pm, and are not authorized to abuse or harass debtors. Adding to this, consumers’ employment addresses cannot be contacted by them.

Reporting a Fraud

If the residents of Washington find themselves to have any suspicions regarding any sort of unlicensed activities by payday lenders, they should contact or place a complaint to DFI. And if consumers belong to some other state, they should visit NMLS consumer access, where they can find their respective state regulator.

If consumers feel victimized by loan scams, they can either contact the Federal Trade Commission, or the Consumer Financial Protection Bureau. This should be done because consumers become victims of identity theft if scammers have access to their social security numbers and information regarding their bank accounts and should immediately take precautionary methods.

If consumers think that they are victims of any loan scams that involve the internet, then they are advised to immediately contact the Internet Crime Complaint Center by visiting their website online.

All consumers who think that they are victims of loan scams, and have concerns regarding the confidentiality of their personal financial information can either contact their banking institution, or seek help by contacting the 3 main credit bureaus.

Read more about the FTC guidelines to avoid spam here.

What Is The Real Price Of Title Loans?


The Center for Responsible Lending mentioned in a report, which was issued this week, that consumers who have exhausted their borrowing options are the ones who use their automobiles and vehicles as collateral and pay $3.5billion in interest each year for title loans, also known as auto title loans. The report illustrated that on an average, loans are priced at $950, and borrowers have to repay the loans within 10 months. This means that they spend $2,140 to borrow the amount.

Title Loans vs Payday Loans


The author of the report, Uriah King, said that the title loan market size is approximately equal to the payday loan market size, which has been the target for regulators. Title loans are only permitted in about half of the states of the U.S.A. and the size of these loans is what forms the basis of this comparison.

This dictates that title loans are about 3 times larger than payday advances and on an annual basis, around 7,730 lenders earn $1.6 billion in title loans. Consumers, who are unable to use options like credit cards for short term loans, are drawn to the television ads at night that show title loans as their best solution.

payday loans vs title loan market

How Much Can You Borrow

Consumers can usually borrow a maximum of 26% of an assessed worth of the car they own, and loans are issued at about 25% interest every month. So, $250 is the cost of borrowing $1,000 a month.

How much can you get for a title loan in USA?

The Risk

Borrowers can lose their cars to repossession if they default in payment, while lenders face no risk whatsoever.

Repossession leads to additional fee costs of $300 to $400 leading to repayment of outstanding loans almost always. Before the Consumer Financial Protection Bureau (CFPB) was created, lenders were only governed by state laws and didn’t have to answer to regulators of federal lending.

Lenders normally do not make assessments of the ability of borrowers to repay loans. Some ads also boast that no credit history checks are required and employment doesn’t need to be proved to borrow title loans.

King mentioned that title loans cannot be repaid in a month as middle class families will struggle to pay loans of $1,200 which is the amount of the principal, plus interest. What happens is that the loans are then renewed per month for 10 months on average.

Title Max and Loan Max are the top two title loan issuing companies. Title Max provides more than 2,000 customers with auto title loans per day.

American Association of Responsible Auto Lenders is a trade group set up by the title loan industry. This group, in 2011, sent a letter to CFPB in which they argued that their customers preferred title loans to late fees and overdraft fees that could have negative credit consequences.

In the letter, it was stated that title loans of $6 billion were obtained by 1 million consumers on an annual basis and mentioned that this industry, worth $38 billion, was small in comparison with the payday loan industry.

They also mentioned that title loans on average, were under $1,000 and were repaid within a six month period. And since low credit scores would pose a problem in obtaining loans from commercial banks, therefore, auto title loans are the legitimate option that small business owners and individuals usually opt for.

The details of the letter also argued the fact that only a percentage of 6 to 8 cars are repossessed. Whereas the Center for Responsible Lending accounted that almost 17% of auto title loan customers face fees of repossession. Uriah King mentioned that there was no way for them to know the amount of cars that are ultimately repossessed.

Responsible Lending

responsible lending centerAccording to the Center for Responsible Lending, assessments of the ability of borrowers to repay loans should be conducted by title loan firms before they can issue loans and interest rates should be capped at 36%.

More details can be obtained in the full report by Uriah King.



Title Loan USA info web size

Download this infographic.

Embed Our Infographic On Your Site!

5 Ways to Get By With a monthly paycheck of Less Than $1500

monthly paycheck of Less Than $1500

People who earn less than $1,500 on a monthly basis can find themselves facing tough situations and choices especially with the sky high costs of various products and services these days. If you use up all of your monthly income without saving anything, then you will be living paycheck to paycheck, which isn’t a very safe way to live.

You never know when emergency situations can arise and one must always have some savings for the rainy day to assist them and be their saving grace when they need the money on an urgent basis. Mentioned below are 5 ways by which you can get through the month with such a low income and also save some of the money in the process:

Draft Your Budget and Spending Plan

Prepare a budget so that you can get to know your financial standing and how much money you actually have, before spending it all. Keep a track of all of your credit and bank statements and don’t forget to keep the receipts of the items that you pay for using cash. This is a good way to know where your money is going and try to cut back on things that are unnecessary.

Your basic necessities should be fulfilled first like payment for food and rent, payment of utility bills and fuel expenses for your vehicle or the payment for public transportation. This is a good system for providing you with a snapshot of your financials.

basic necessities should be fulfilled first

Prepare Yourself By Saving

Always remember to keep a little bit of money every month for emergencies instead of spending the money on shopping for items that will just be lying in your closet without being used. Every month, set aside some money no matter how small an amount. Be it $30 or $50, take it from your paycheck, and put it in your savings account.

When you get into this practice of setting aside the money, before you know it, you’ll have some cash saved up, all thanks to your monthly saving goals.

Avoid the Accumulation of Debt

Sometimes, you can’t help it, but whenever you can, try your best to avoid getting into circumstances that can lead to the creation and accumulation of debt. With your spending plan before you, you will have a much clearer picture of the current debt you owe, and your first goal should be getting rid of that outstanding amount from your financials by paying off your debt.

Try as much as possible to stay away from taking loans frequently, unless it is absolutely necessary. Because with loans and borrowings, interest charges come along that can, at times, reach unimaginable heights, as it is with payday loans.

Control Your Expenses

Even though you live on a low income, it is still possible to have a decent life and one way of doing so is by controlling your expenses. Have a look at your budget and spending plan and try to start spending money wisely.

4.	Control Your Expenses

If your rent is too much, try to move to a cheaper apartment, spend less on alcohol and recreation, and avoid buying fancy things and luxury items that are expensive but serve the same purpose of things that can be purchased at cheaper rates. When you’re not around your house, turn off the lights so as to save some money on your electricity bills, and if you’re a smoker, try to cut down on those cigarettes; they are costly apart from being bad for your health.

Find Ways of Boosting Your Income

Earning some extra cash is always helpful and if you are able to incorporate it in your schedule without getting exhausted and drained, then try finding a part time job.

Another way of boosting your income is by making money by focusing a bit on your hobbies. Photography, gardening, baking, etc., can get you some extra cash, plus, if you are learned and skilled at playing a musical instrument, you can earn some money by giving some teaching lessons.

5.	Find Ways of Boosting Your Income

Following the above mentioned methods, you can get by on a monthly income, as low as $1,500, and find creative ways of saving as well.

info promo

Here is the Full infographic you can download and use on your website using the links below.



Download this infographic.

Embed Our Infographic On Your Site!

Are The US Banks Going Into The Short Term Loan Business?

The US banks that are looking to go into cash loansThe US banks that are looking at lower incomes from overdraft fees and debit cards are increasing their marketing tactics to focus on the provision of short term loans. This has prompted the interest of regulators who are starting to question banks as to whether they are on their way to providing the same risks to borrowers as the payday lending industry.

Firms like Wells Fargo and U.S. Bancorp are offering high cost loans, whereas their services are supposed to be for those people who have difficulty in obtaining other forms of bank credit, like customers of online payday lenders.

Is it in violation to the state’s interest rate cap?

Roy Cooper, Attorney General at North Carolina, asked Regions Financial for information showing that its loans are not a violation to the state’s interest rate cap. This scrutiny led to a decision by the Federal Deposit Insurance Corp. (FDIC) to investigate the payday-similar products that are being offered by the US banks. The Consumer Financial Protection Bureau (CFPB) also joined in on an inquiry of the same subject.

Cooper said that institutions are lending money at extremely high rates of interest and are getting re-paid at the next paycheck. He further added that these kinds of loans need to be prevented in North Carolina.

CFPB declared that payday loans can charge annual interest rates that can go to a maximum of 521% which traps consumers into a never ending debt trap. And online versions of these loans require that clients should directly debit the payments from their banking accounts.

Does US banks give this kind of loans?

5 banks, at least, are offering such payday resembling loans of online versions and the term payday is not used by these banks. The Wells Fargo loan is called Direct Deposit Advance, while Regions is marketing its loan as Ready Advance. The US banks are saying that they offer lower rates of interest in comparison with payday loans and they ensure that indefinite borrowings by customers cannot be renewed.
A study by the Center for Responsible Lending based in Durham, North Carolina, showed that banking products do have similarities that resemble payday loans. It illustrated that bank loans are structured in the same manner as payday loans where customers and borrowers get trapped in a multitude of payday advances every year.

Fifth Third Bank also offers payday resembling products that are a violation to state interest rate caps and the suit alleges, the federal Truth in Lending Act. Debra Decourcy, spokesperson for the bank refused to make any comments on pending litigation.

The US banks that do not separate their short term loans from their earnings while reporting results, are in search of methods that can replace the lost revenue. According to Fiserv, a firm that sells software package solutions to aid banks in marketing and managing their products, banks are focusing their efforts increasingly on short term loans. This way, they can serve a variety of consumers in much more cost effective methods.

The Relationship Advance software by Fiserv helps banks in identifying the customers that are most likely to be receptive to obtaining short term loans. CFPB is investigating if banks are marketing such programs in a way that is misleading and this investigation may lead to shrinkage in the revenue flow of the banks.

This software by Fiserv is displayed in the form of a button on bank accounts that are online.And when consumers click on it, the software takes them through an enrollment process.

As for the bank loans, Wells Fargo offers customers up to $500 in its Direct Deposit Advance, charging $7.50 on every $100 that are borrowed. Consumers are allowed to access a maximum of 6 consecutive loans and if they fail in making payments after those 6 loan amounts, Wells Fargo will not permit any more cash advances to the consumers until they have paid their debt in full.

So what do you think? Is it really a payday loan or not? Please comment here: