Complaint Review: ameriloan - Internet

"should we allow poor people to be taken by these types of practices because they are too foolish to find out just what the terms are? "

   I find it interesting that you equate poverty with foolish behavior.   As a former poor person, I take exception to that.

   As far as what poor people should be "allowed" to do, where are you going to draw the line?   Will you be the judge as to what is and is not financially responsible?   If not you, then who?  It's a very slippery slope and when it comes to finances, one size will not fit all.

  Here's the bottom line.   In this free country, both rich and poor are allowed to enter into agreements.   Not all agreements are financially prudent, but we leave the decision up to the individual.  If there were laws against financial foolishness, 80% of this country would be in jail.

  If you really wanted to go on a crusade to keep people from making poor choices for themselves, you'd not only have to get rid of high interest payday and title loans, but I'd say that you'd also have to do away with credit cards as well.    If you've ever read a credit card agreement, you know what I'm talking about.    Personally, I think there are very few reasons that individuals should need to borrow money and pay interest.   Would you want ME deciding your financial choices?   I bet not.  

I understand the concept if making money, providing a service, and reaping what you sow.  Ameriloan is a company with poor business practices.  I tried finding out just how much interest they charge on each loan and this is what I found

What does it cost? Cash advance loans are designed for emergency situations when you are short of cash and need money fast! Family emergencies, unexpected car repairs, overdrafts, telephone reconnection and deposits are just some of the urgent cash needs our customers have experienced. 

Your fees are less than the cost of not having the cash you need when you need it - overdraft fees, bounced check charges, taxes, even losing your job because you can't get to work! Actual fees are determined based on the information you provide when you submit your loan application. 

Your cash can often be sent to your bank account the very next business day and you don't repay until your next paycheck!  

What they dont tell you is that the first several payments (5 to be exact) on the loan are interest if you dont pay it in full by the next payday.  They withdraw these payments twice a month till the interest is paid, then they start taking out payment for the principle.  When you accept the loan these terms are available in the page sent to your e-mail, but it's rather confusing and unbelievable that they aren't more simplified.  Most people requiring these loans aren't lawyers, doctors or politicians.  These are people experiencing tough times

When a loan of $200 is charged almost %300 in interest to make the loan amount nearly $600, I find that to be extremely excessive.

Should we allow such trickery, should we allow poor people to be taken by these types of practices because they are too foolish to find out just what the terms are?  What would you do if this happened to our mothers?  If there is a god I don't think that he would find this acceptable, but that doesn't matter here in this world.   $$$  the new god?

I see where both sides of "the coin" with respect to this argument. Yes a business should be allowed to charge interest or a finance charge for lending services. However, they are not allowed to do business in states where they are not licensed in, as well as charge interest above both state and federal usury caps like Ameriloan is doing.

In this case the state is New Jersey, assuming the author's bank account was opened there, therefore making the usury limit of 30% APR. The federal usury limit is 36% APR. They will say that jurisdiction would be in their state which i believe is Oklahoma, but I don't believe that to be true. New Jersey doesn't have and specific laws on the books regarding Pay Day Loan companies both in and out of state, but they do out law the practice by saying anyone who charges interest over 30% APR could be charged criminally.

 So if you (the author), want to try and "...get this place out of business...", I think that's your best avenue of attack. I would call the state AG, as well as the NJ Dept. of Banking and Insurance, and the FTC to notify them of the issue (I can assure you that you're not the first, and will be far from the last complaint about Ameriloan).

Hope that helps and at least points you in the right direction.

The way to put these people out of business is to make the borrower take an IQ test before they get the loan.  If their IQ is less than their age they can't get the loan.  That alone would probably put these companies out of business in a week.

Let us know about what the AG says when you tell them that the company shouldn't be able to charge interest.