Looking For Loans in All the Wrong Places

How I got involved with payday loans—and how I got out.

Photo credit: frankieleon, CC BY 2.0.

The Loan Reason

Having money isn’t the most important thing in the world, but it does help make life a little easier and a little less stressful. Especially when you are behind on bills or dealing with unexpected expenses. So, when an opportunity presents itself to get extra money to help out with those issues, it can be difficult to resist.

Years ago, I was going to school full time and working full time—but I was still behind on my bills. I couldn’t ask for a personal loan from a bank because my credit at the time was not great. I’d already maxed out my credit cards, and I couldn’t ask family members for money because I already owed them from previous loans.

So I looked to use a payday loan to help me catch up and lighten the mental load. Little did I know that it would add to my problems.

Yes, I had heard the horror stories. I knew that the interest rates were ridiculous, and that payday loans could create a abyss of even more debt. But I turned a blind eye to all of this because I desperately needed the money.

I decided to use Money Mutual, because it was one of the payday loan services that had a celebrity spokesperson. I assumed I could trust them, since Montel Williams signed on to do the commercials.

The Process

I started out by borrowing $500. The process was simple; I filled out a couple pages of information. I was hesitant to press the submit button on the last page because the form asked for my banking information and Social Security Number, but I figured there would be no harm and reminded myself that Montel Williams was advertising it. After I allowed that thought to calm my suspicions, I pressed submit to prompt the system to find me a loan company to borrow from.

After about 20 seconds several companies popped up, ready to loan me money. I chose the one I felt had the best interest rate, although all of them were high. USA Today reports some of them were charging 1,000 percent interest.

Company backed by Montel Williams faces crackdown

A New York banking regulator on Tuesday blasted loan finder MoneyMutual for hiding behind its celebrity endorser, Montel Williams, in wrongfully marketing loans with sky-high interest rates — some exceeding 1,000% — to struggling New Yorkers.

I got accepted, finished my application over the phone, and the next day I had money to help me out for the next two weeks. I felt good. I was empowered to take on my busy life, until the repayment day of my loan came. I couldn’t pay it all at once, and I knew if I didn’t I would wind up on a payment plan that would have me paying back twice as much as I had borrowed initially, but I had no choice.

So I paid $250 towards my loan, and still owed $500 total. Every week I didn’t pay the full $500 I had to pay a fee. Eventually I wound up needing another loan. This set up the downfall of my financial situation.

The Loan Return

Once again I found myself on Money Mutual, repeating the whole process. Finding another loan company that was the best out of all them. This time I borrowed $400. Everything was pretty much the same as before, except now I kept getting e-mails and calls telling me that I was pre-approved by several loaners. So many emails were offering me money that it took me literally an hour to get through them all.

Then I noticed that my bank account was being funded with multiple $400 amounts for no reason that I could understand. I reached out to my bank to get the information of the companies that were putting money in my account. These companies told me I had accepted the terms to receive their funds and I needed to pay the money back with interest. Furious, I told them I was giving the money back and not paying any interest. That’s when the companies started to harass me with phone calls and threaten me. They even called my place of employment—and my mother, whom I used as a reference.

I started to regret ever trusting Money Mutual. Not only was I dealing with money that I didn’t agree to borrow, but the loans I had before started to pile up to the point where I owed $850 on my original $500 loan. I started to receive threatening messages from them as well, telling me I would be served or that law enforcement would come to pick me up at work.

It was a stressful situation. My bank account was spiraling out of control and I still had to take care of my classwork while working full time.

Just Won’t Leave Me a Loan

My situation got even worse when I got a call from a company that was pretending to be a different company that I owed money to, saying I owed $850 to them as well. They had all my information and were able to tell me how much I initially borrowed. I was scared and nervous that they’d try to arrest me at my workplace, so I set up a payment plan with them as well, starting off with $50. But I didn’t want to give up my money that easily, so I decided to look up the location, reviews, etc. of this company. The company was a fraud and I had almost paid them $850! The thought of being possibly swindled made my stomach turn, and I knew in order to prevent any more of these occurrences I had to take action.

I was able to get out of this situation by following procedures given to me by the police and the Federal Trade Commission. They instructed me to close my bank account and, if I got any more calls from payday scammers, to inform them that law enforcement would be contacted.

FTC Action Stops Massive Payday Loan Fraud Scheme

The settlements stem from charges the FTC filed last year alleging that Timothy A. Coppinger, Frampton T. Rowland III, and their companies targeted online payday loan applicants and, using information from lead generators and data brokers, deposited money into those applicants’ bank accounts without their permission. The defendants then withdrew reoccurring “finance” charges without any of the payments going to pay down the principal owed. The court subsequently halted the operation and froze the defendants’ assets pending litigation.

Since then there has been a crackdown on online payday loans and they’re even illegal in some states. I was glad I paid back all of the loans I borrowed money from and put my payday loan borrowing days behind me.

Felipe Patterson is a healthcare provider, freelance writer, poet, health and fashion enthusiast. Contributor to Taji Magazine. Can be followed on Facebook and Twitter @ Dapperdrfeel.

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