The number of
Americans who apply for pay day loans has grown steadily over the past 6 years
and the momentum doesn't look to be slowing down anytime soon. Several states
have enacted regulatory legislation in order to control the pay day loan sector
in response to consumer complaints and allegations of loan sharking by the
media.
As far as the big
picture goes, the pay day loan industry does not have an exceedingly high
complaint ratio. One national pay day loan provider states that it's written
customer complaint occurrence is less than 4%, which conversely could be
interpreted as a 96% satisfaction rate, depending on who is quoting the
statistics.
In the financial
products industry and specifically with pay day loan products, one may think
that the most common consumer complaints fall directly in line with media
reports and revolve around high interest rates, predatory lending practices,
collection harassment, or a myriad of other potential complaints, however the actual
type of complaints that have been filed with the Better Business Bureau,
Federal Trade Commission and various States Attorney General's offices paint a
different picture indeed.
Here are the 3 most
common type of complaints filed by consumers against their pay day loan
providers.
1. Our research shows
that the most common consumer complaint is that the pay day loan companies make
it very easy to complete a loan application online and provide instant
approvals, however they do not provide an easy way to increase weekly or
bi-weekly payment amounts on the same website. At first glance this wouldn't
even seem like a reason to complain as the company is drawing a very low weekly
payment for the loan, however many consumers would like to pay off their loan earlier
than originally scheduled in order to avoid added interest charges, but instead
of being able to do that online, they must call and speak to a live customer
service agent in order to alter their previously agreed upon payment terms.
This general area of complaints accounts for over 1/3 of all complaints filed
with the Better Business Bureau.
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