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September 7, 2011

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.__.__~, ...i ~ . ....... '__~L72~L~-~__-~"~-.'~." _ ........ SENTINEL TRIBUNE VIEWPOINT Wednesday, September 7, 2011 Page 4 I Attorney General Swanson Sues Five Internet Payday Lenders Warns Consumers About Pitfalls of Online "Short Term" Loans Minnesota Attorney General Loft Swanson today filed separate law- suits against five Internet lenders that made loans to cash-strapped Minnesota borrowers that were mar- keted as providing "cash between paydays," but that contained unlaw- fully high annual interest rates of up to 782% percent and that were often illegally extended from paycheck to paycheck, trapping the borrower in a cycle of expensive debt. The Attorney General warned Minnesotans against taking out loans over the Intemet from unli- censed lenders, citing a growing list of complaints to her office from consumers who have done business with such companies. "Many people are living pay- check to paycheck right now, and unlicensed Intemet lenders offer easy credit. This credit comes with a hefty price tag and often leaves a rash of problems in its wake," said Attorney General Swanson. The Internet payday loan industry is estimated to have a total loan vol- ume of $10.8 billion in 2010. Attorney General Swanson said that, in recent months, consumers who have taken out or even just explored the option of short term loans from unlicensed Internet com- panies have experienced the follow- ing types of problems: *High interest rates. Minnesota law caps the interest that licensed lenders may charge. Unlicensed Internet payday lenders regularly violate these caps, charging annual interest rates of up to 782 percent. *Auto-extensions. A 2009 Minnesota law prohibits a short- term lender from extending payday loans of less than $350 for over 30 days and from using the proceeds of one payday loan to pay off another. Online lenders routinely violate these laws by either extending the loan and withdrawing only interest ating attorneys or law enforcement, demand large payments, and fre- quently attempt to scare or intimi- date consumers into paying with threats of arrest or legal action against them or their families. The five companies against which the lawsuits were filed are: *Flobridge Group, LLC of Utah, which touted its loans as "cash flow 'til payday" and "a little emergency get you to your next payday." *Integrity Advance of Delaware, which advertised its loans as a way "to get a cash advance until your next paycheck" and that its loans are "designed as a short-term cash flow solution." *Silver Leaf Management of Utah, which states that its loans "provide you with emergency cash..." *Sure Advance, LLC of Delaware, which represents that its payday loans "are not intended to meet long-term financial needs." *Upfront Payday of Utah, which states that online payday loans offer "cash when you need it most ... usually between paydays!" *The lawsuits allege that the loans have high rates of interest and other finance charges that violate Minnesota law, making it difficult for consumers to pay down the prin- cipal. The lawsuits allege that the companies sometimes unlawfully "extend" or "refinance" the payday loans far beyond the consumer's next payday, trapping the consumer into high interest payments over an extended period of time. The law- suits also allege that the companies violated Minnesota law by making loans to Minnesotans without being properly licensed by the Minnesota Department of Commerce. The companies sued each charged inter- est rates of about 782 percent on a two week loan. The interest spirals when the loan is not paid back in two weeks. Under Minnesota law, for loans less than $350, Minnesota law caps ~gespr.:by, !'rolling over", the the fees that.may be charged~n a: "lo'an, 'p~i);ing off the qld~ loan with sliding scaleas l'oll6ws: $5.50 ,for the proceeds from the new loan. loans up to$50; i0 percent plus a $5 These practices can turn a payday loan--advertised as a short-term financial fix--into a long-term finan- cial nightmare where borrowers pay far more in interest than they intend- ed to borrow. *Unauthorized withdrawals. When consumers take out an online loan, they must provide their bank- ing and personal information. Some consumers report that unlicensed lenders made unauthorized with- drawals from their accounts, some- times of hundreds of dollars. *Unlawful debt collection tactics. Consumers report that some online lenders and their collectors use ille- gal debt collection tactics, such as threatening that the consumer will be taken to jail and prosecuted for a financial crime, or attempting to illegally garnish their paycheck. *Phony collection scam. Some consumers who did not even take out a payday loan, but who only explored the option online, report being hounded by overseas scam artists who threaten to have them arrested if they do not pay, even though the consumer does not owe any money. These scam artists con- tact the consumers, often imperson- fee on loans between $50 and $100; 7 percent (minimum of $10) plus a $5 fee on loans between $100 and $250; and 6 percent (minimum of $17.50) plus $5 fee on loans between $250 and $350. For loans between $350 and $1,000, payday lenders cannot charge more than 33 percent annual interest plus a $25 administrative fee. Attorney General Swanson issued the following advice to consumers: Before doing business with an Internet payday lender, make sure it is licensed to operate in Minnesota. You may check the Commerce Department website online at www., or you may call (651) 296-6319. Check if the lnternet payday lender is complying with state interest rate caps and other state consumer pro- tections. Be wary about giving out infor- mation online to unknown Internet companies. This can expose you to potential privacy and fraud risks. AI BaH... "Stories from the BaH Cave" Procrastination I was going to write this col- umn months ago. I just never got around to it. Then I heard about Ole. Ole had gone to the doctor and got bad news. He had only a few weeks to live. Ole came home and told Lena the news. Ole slumped into his easy chair and Lena went to the kitchen. Ole smelled a heavenly aroma. Lena was making his favorite sugar cookies. Ole walked into the kitchen and grabbed a cookie. Lena slapped his hand and said, "Ole, you can't eat that. These cookies are for after your funer- al!" Lena was no procrastinator. There is no expiration date on a birth certificate. John Lennon said, "Life is what happens to you while you're busy making other plans." We tell ourselves that we'll do something when we have more money or more time. When we find the money or the time, we have no energy. Life is as short as a pig's kick, so procrastination is not a good plan. Most of us prepare for old age by doing nothing more than get- ting older. We put things off. We plan to make a list of things to do today but we never get around to making the list. Procrastination is the art of keeping up with yester- day. Winter is our most famous pro- crastinator. It procrastinates- not in arrival but in departure. Most of us, while as students, have awakened one morning with the realization that the report we had two months to complete and hadn't started was due that day. I visited with a fellow ~n one of our southernmost states. He was talking about a broken latch on his yard gate. "I've been fixing to fix that," he The bad part of this technique is said.that it ruins the toad's day. His wife added, "He's been fix- We do things just as we ing to fix that for years." remember things. The man wasn't a slacker. He Later. knew that he should be doing Procrastination gives us some- something that he wasn't. Our thing to anticipate because a elders tried to steer us down the procrastinator's work is never correct path. done. "Don't put off until tomorrow Do something good now, while what you can do today." you think of it. "Don't leave things half-fin- Then have a sugar cookie. ished."The latest headlines from "The early bird gets the worm." Hartlend Harold. "He who hesitates is lost." New florist, Rhoda Dendron, They almost had us convinced, decides to stop and sell the Then they kept talking, roses. "Look before you leap." Garage Mahal Construction's "All good things come to those carpenters level city. who wait." At MT Belly's, fish come with "Patience is the companion of heads still on to help see you wisdom." through tough times. The eatery 'q-he second mouse gets the offers a legendary menu--Sas- cheese." quatch steak, unicorn roast, That is why we are confused Pegasus prime rib, and Loch ar)d are fixing to do things. We _Ness monster meatloaf. wait until we can't put things off- Local dentist,~ Phil Eng, puts any longer, your money where your mouth There is a thrill in completing a is. task at the last moment. Some Saint Menard's Hardware believe that waiting to the last Store offers free glass eye with minute is good because a dead- each BB gun purchased. line focuses the mind. Others Ask AI call procrastination the thief of "How can I tell a male from a time. Research shows that 95 female deer?" By the buckteeth. percent of people procrastinate "How can I tell weeds from and the other 5 percent have vegetables in my garden?" Pull been meaning to procrastinate them. If they come back up, they but haven't gotten around to it. are weeds. Simple things can remedy pro- "Why do birds fly south?" It's crastination. Turning off the email too far to walk. notification on your computer "Does your hometown have a increases productivity by 10 per- rest home?" No, we use a rest cent. Having a loved one whip area instead. you with a wet noodle until you "How do I decide which rowing complete a task increases pro- implement to use in a rowboat?" ductivity 110 percent. Either oar. I do the things I don't want to do first. That gives me more time to look forward to the things I AI Batt 2011 want to do. That's a good thing. 71622 325 St. Eat a live toad the first thing each 1-1, MN 56042 morning. That makes whatever http:llalbatt.neti you have to do later seem easier. 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