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71. |
Who generally opt for the
payday loans? |
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Payday loans generally appeal
to younger consumers, people who don’t have much idea of the finances and
the people who are in greater debt. Payday lenders are in search of the
people who are in heavy debt or the persons who have a history of getting
money with high risks. |
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73. |
Are there any rules that a
payday advance provider must follow? |
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Full Disclosure: The members should abide by
the rules of the State. In this loan the member should make the customer
aware about the terms of the payday advance transaction. Members should
very clearly inform about the service fee in dollar and also the annual
percentage rate (APR).
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Compliance: A member should not charge for the
fee of the payday loan which is not authorized by State or Federal Law.
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Truthful advertising: The advertising of the
payday loan should be very clear without any wrong or misleading or
deceptive manner.
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Encourage consumer responsibility: A member
should guide the customer correctly by informing them that the payday
loan is not the long term cash flow, instead is a small term cash flow
fulfilling the customer requirements in emergency. Also they should
explain the customer of the availability of credit counseling services.
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Rollovers: Rollovers should not be allowed by
the members if the State laws do not allow them. It is allowed only if
the State laws allow, but only to four (4) rollovers only or whatever is
the State limit, whichever is less.
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Right to rescind: Right to rescind should be
given to the customer with no cost.
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Appropriate collection practices: Collection
should not be done by unlawful threats or harassment to collect
accounts.
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No criminal action: The member should not take
any criminal action over customer if his/her check bounces or his/her
account is not being paid.
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Enforcement: Self-policing of the industry
should be done by the members. A member should report violations of
these practices to CFSA so that investigation is carried over and
appropriate steps would be taken. The member should have its own
toll-free consumer hotline number at each of its outlets.
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Support balanced legislation: To carry out
responsible legislation of the payday loan the member industry should
work with the State legislators and regulators.
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Relationships with financial institutions: If
the financial institution does the following then the member should
market and service payday loans by a federally insured financial
institution:
a. sets its own credit criteria
b. approves and funds each advance
c. Where consistent with Federal law, comply with State disclosure
requirements.
d. regarding number of rollovers, comply with State law
e. members are not permitted to purchase not more than a de minimis
amount of the advances and
f. should also comply wit Best Practices
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74. |
What is meant by electronic
post-dated check? |
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This is a type of a paper
check for the World Wide Web. In this type of check one feels in the valid
information of his/her with his/her initials at the end of agreement that
allows the receiver (in this case money lender) to electronically withdraw
the specified amount of money on specific date from the checking account,
as mentioned in the agreement. It is said post dated as money is only
withdrawn only the date specified on the agreement i.e. after today. Thus,
it is similar to the normal check but its transaction is made electronic. |
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76. |
What are the points to be kept
in mind after getting the payday loan? |
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There are some very
important points to be kept in mind:
- One should not get default on payday
loans. One should always pay back the money lender. By not paying them
regularly problems like Non Sufficient Funds (NFS) fees from the bank
would levied due bouncing of the checks. Also charging of NSF fees would
be done by the money lender company. Money lending company may also send
the account to a third party collections agency. The money lender would
also humiliate the person by calling the person, his/her family and
friends at home as well as at work place of the person. In some of the
state the money lending company would also charge double what the person
owed to them. Thus, they make this very expensive.
- Many of the persons do their shopping
over the web by buying any commodity online. Due to this they have to
fill out applications regarding the payment. Here, when the person fills
out applications and in it mentions more than one payday loan company
website, any personal loan company gets the bad impression of the credit
of that person. This is because they get the impression that the person
might not be able to pay them since he/she has loans to pay.
- The NSF charges should be very low in
ones checking account. If it isn’t, then it would create an impression
that the person is unable to pay his/her bill or the person doesn’t want
to pay his/her bills. Thus, due to this nobody in future would pay the
person any loan.
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