In payday loan debt? Don’t let false promises sink you in deeper.
Many people who take out payday loans have trouble paying them off quickly. A recent FTC case shows how dishonest companies can take advantage of people who can’t make their payments, while fees and interest costs grow.
Payday Support Center promised to help people who fell behind on payday loan payments. According to the FTC, the company’s ads gave false assurances that it would pay off or eliminate payday loans in a short time. Payday Support Center charged an enrollment fee and biweekly payments — sometimes hundreds of dollars. According to the FTC’s complaint, Payday Support Center claimed to negotiate interest-free payments, apply the biweekly payments to loans, and either pay off or eliminate the loans — all through what they said was a four- to six-month program. The FTC says the company even convinced people to stop paying the loan companies altogether.
So, what happened to borrowers? The FTC says that borrowers’ payments didn’t go toward paying off their loans. Borrowers still owed money under the original loan terms, and sometimes even owed more money because of interest payments and late fees. Instead of getting help, borrowers got a piece of paper: according to the FTC, Payday Support Center simply sent out form letters asking the lenders to prove the loans were legitimate. But the company did not, the FTC alleges, make efforts they’d promised to pay off or eliminate consumers’ loans.