If you need help getting out from under an internet payday loan, you can visit www.virginiafairloans.org or call the Predatory Loan Help Hotline at 866-830-4501.
October 30, 2012
By Monique Coppola
RICHMOND, Va. – West Virginia's Attorney General Darrell McGraw has won a settlement with Lakota Cash, an Internet payday lender based in South Dakota, because it didn't comply with state laws, and a Virginia interfaith group is asking that Virginia Attorney General Ken Cuccinelli take a stand against the company and other illegal Internet loan companies as well.
Marco Grimaldo, the CEO of Virginia Interfaith Center for Public Policy, says that under the 2008 Payday Loan Act it is illegal to offer Internet payday loans to Virginians – but that hasn't stopped out-of state companies from doing it.
"There is no regulation right now. No one is protecting Virginia consumers, and that's why I think it's important that the Attorney General of Virginia really pursue them and make certain that they are complying with Virginia laws."
Internet payday lending is typically for small loans, in which the consumer usually gives the loan company his bank account number.
Grimaldo says the interest rates are extremely high, at about 300 to 400 percent, but by the end of the loan, which can end up taking weeks or months to pay back, consumers can end up paying up to 800 percent in interest, because the companies automatically renew loans and withdraw finance charges directly from consumers' bank accounts.
"And they don't allow consumers to pay back the full loan amount without providing sufficient notice. All of this is done to keep consumers on a debt treadmill and to make sure that they continue profiting at the expense of vulnerable communities."
Grimaldo says these Internet payday loan companies are not licensed to do business in Virginia, but because they target low-income people, many of these individuals have no recourse. He says anyone who has been a victim of Internet predatory lending should contact the Consumer Protection Hotline number in the Virginia Attorney General's Office at 1-800-552-9963.