As consumers have lost their jobs and struggled to make ends meet during the COVID-19 pandemic, many have turned to payday loans and other short-term solutions, with offers increasing in line. This has not only allowed predatory lenders to thrive as many borrowers continue to face exorbitant interest rates and hidden fees, but it has also created a fertile environment for scammers, according to new investigative research. from the Better Business Bureau (BBB).
Payday loan laws are managed from state to state among the 32 states in which they are available, and a complex web of regulations makes the impact of the industry in the United States and Canada difficult to understand. follow. The BBB study finds a common thread, however, with the triple-digit interest rates that many of these loans carry – camouflaged by interest compounded weekly or monthly, rather than annually, as well as significant rollover fees.