“They were debiting my bank account and causing overdrafts so I had to close the account and default on the loan. They contacted my in-laws (I don’t know how they found them!) and told them they would have to go to court to testify because I was being arrested for bank fraud.”
“I told them I couldn’t pay anymore because I was laid-off and they said they would follow my social security number and when I found another job they would come after me.”
“I paid them $189 because they said I had to make the first payment up-front before I got the $2,000 loan but I never got the loan and they don’t answer the phone.”
This is what we hear from people that call our hotline for help with predatory loans (866-450-4551). Although we get calls about all types of loans, the majority of calls recently have been like these. And the reason these people are getting these calls? They applied for loans on the Internet.
Because of calls like these, VPLC, along with Consumer Litigation Associates and Kelly and Crandall, filed a class action lawsuit last week. This lawsuit is on behalf of people that go to Internet loan websites and enter their personal financial information. This information is then sold and used to harass people into getting these horrible loans and to harass the borrowers when they inevitably default. The information is often sold to scammers who convince borrowers they must pay fake debt collectors to avoid imprisonment. The defendant in this case, Clarity Services, is involved in this unlawful dissemination of borrowers’ personal information. We are suing them for violations of the Fair Credit Reporting Act.
VPLC has operated a hotline for several years for victims of predatory lending. We have talked with over 600 people and recently a majority of our calls come from those caught up in online lending. Pew Charitable Trusts recently did a report about online lending called “Fraud and Abuse Online.”