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Consumer Alert:

06/07/2011

CONSUMERS SHOULD BE WARY OF UNLICENSED PAYDAY LENDERS DOING BUSINESS ONLINE

 

 

~ The Florida Office of Financial Regulation advises consumers to guard against illegal loans by unlicensed online payday lenders and the unlawful collection of these debts. ~
 
TALLAHASSEE, Fla. (June 7, 2011) – The Florida Office of Financial Regulation (OFR) is warning Florida consumers about unlicensed companies issuing illegal payday loans in the state, as well as unlawful attempts to collect on those loans. Unlicensed lenders advertise loans that fail to comply with Florida’s consumer protection laws. While the offer of immediate cash might be enticing, these loans are often predatory lending and dealing with unlicensed companies that do business over the Internet makes it especially difficult to resolve issues when problems arise. These internet companies are difficult to track and may be located outside the United States.

“Florida consumers should be aware that if a company is not licensed to make loans in Florida, these loans are illegal,” advises OFR Commissioner Tom Cardwell. “Internet payday lenders and collectors who fail to abide by Florida law should also know that they risk forfeiting the money they send into this state because these loans are unenforceable under Florida law. Moreover, OFR will enforce the consumer protection laws. Those who disregard these laws, either by making illegal loans or attempting to collect them, should be prepared for the OFR to take action against them.”

Consumers should also be wary of providing their personal financial information over the Internet. In some instances, the consumer has not even taken out an Internet payday loan and the collection attempts are simply scams to bully individuals into providing their private information or to send money. The individuals behind these unlicensed lending schemes and the accompanying unlicensed collection efforts often take steps to remain purposefully hidden.

The Office of Financial Regulation offers the following tips for consumers to avoid becoming victims of unlicensed Internet lenders and unlicensed debt collectors:
 
• Check to see if the company is licensed in Florida to provide short-term loans or collect debts. Consumers can visit http://www.flofr.com/Consumer/Verify.aspx to get current information on licenses.

• Learn about consumer rights under the Federal Fair Debt Collection Practices Act. The Federal Trade Commission provides information sheets at www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm.

• Read the fine print in any agreement.

• NEVER sign or agree to anything you do not fully understand.

• Don’t release personal information, including bank account numbers.

• Don’t send money unless you know of or have confirmed the debt.

• Check your credit report to make sure that no one has opened accounts in your name. Consumers may receive a free copy of their credit report once every 12 months from each of the three major credit reporting agencies, Equifax, Experian and TransUnion, by calling 877-322-8228 or visiting www.annualcreditreport.com.

• If you feel you have been a victim of an illegal internet payday lender or an illegal debt collection agency, you can file a complaint with the Florida Office of Financial Regulation at http://www.flofr.com/Consumer/Complaints.aspx or by calling 1-800-848-3792.
 
The Office of Financial Regulation is committed to protecting Florida citizens by carrying out the banking, securities and financial laws of the state efficiently and effectively and to providing regulation of business that promotes the sound growth and development of Florida’s economy.
 
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