Internet payday lenders just as bad as brick and mortar companies

BOSTON - As part of what he referred to as "an ongoing effort to educate consumers on the perils of payday loans," Commissioner of Banks Thomas Curry, along with Consumer Affairs Director Jennifer Davis Carey have released a report they say "strongly" cautions consumers to avoid Internet payday lending companies. With an Internet payday loan application, a payday lender electronically transfers funds into a consumer's checking account. At the close of the loan term, usually following the deposit of the consumer's next payroll check, the payday lender automatically deducts the loan amount and interest charged from that account. As a result of the Massachusetts Commonwealth's Small Loan Law's usury cap on small loans, no payday lenders are physically located in Massachusetts. However, said Curry, a growing number of companies are offering payday loans over the Internet. These companies aren't licensed by the Division of Banks, so they're subject to little or no regulation. Consumers who have been victims of doing business with an unlicensed Internet payday lender have little or no recourse if they run into problems with the lenders. Curry said he's also concerned about the amount and type of information many Internet payday lenders require. "I can see no legitimate reason why companies would require such personal information as your ATM PIN, license plate number, social security number, mother's maiden name, height, weight or eye color." In comparison, Internet payday lenders provide little or no information about themselves, said Curry. Copies of the report, "Internet Payday Loans - Risky Business" are free and available by calling the division at (800) 495-2265, extension 502. It's also available on the Division's Web site - www.state.mas.us/dob/.