(6/22/2011) - Utah's Better Business Bureau recently issued a nationwide alert warning consumers about an operation selling "payday loan protection" and surreptitiously snatching cash from dozens of consumers' bank accounts.
Over the past six months, more than one hundred consumers from 31 states have filed complaints with the BBB about Washington, UT-based EZ Loan Protection after it snatched cash at $30 a pop from bank accounts -- a total of at least $3,000.
Utah BBB reports the complainants generally allege they have no knowledge of EZ Loan Protection and don't remember signing up for any sort of loan protection, but have been dinged for $30 and are demanding their money back.
Several consumers said they've never taken out a payday loan.
Payday loans are supposed to be quick and easy, short term loans to see you through a brief hard time lasting a week or two.
To the contrary, the Center For Responsible Lending's (CRL) latest treatise on the payday loan industry "Payday Loans, Inc. Short on Credit, Long on Debt," found that the predatory loans have trapped 12 million Americans in a payday loan borrowing cycle that can last for up to two years and cost as much as 400 percent in interest.
It's not surprising an outside operation would try to cash in on vulnerable consumers struggling to escape payday loans. Just as mortgage fraud has piled on since the housing crash, come-ons related to other financial services is a common under current in a weak economy.
Utah BBB says EZ Loan Protection has responded to some complaints, while some remain unanswered and many are unresolved.
The company responds by claiming "Our records indicate that (customer) entered into our program and was charged $30.00 on (date) in compliance with our terms and conditions," according to the BBC.
Some complainants told the BBB they are not sure how the company got their bank account information.
Others say a representative from the company called and offered the product, they declined, but were jacked for the cash anyway.
Other consumers say they were lured by an online popup ad, closed the ad, but were nevertheless charged.
Still others, who seldom conduct business on the internet are "baffled" by how the company got their information.
"This company is obviously not telling customers in a clear and conspicuous manner that they will be charging them for loan protection services," said Jane Driggs, BBB president.
EZLoanProtection.com. One and the same?
It's not known if the two are connected, but a privately listed Internet domain EZLoanProtection.com, due to expire in November, a year after it was initially registered, also appears to offer loan protection services, claming "MORE THAN 17 YEARS OF SUCCESSFUL FINANCIAL SOLUTIONS."
Items quoted below appear just as they appear on the web site.
The site design itself contains a host of dead elements and other red flags that should make any relatively savvy web-browsing consumer suspicious, including a dateline/clock frozen at "Friday, July 18, 2010"; social network buttons and menu items ("Support," "FAQs," "Help," etc.) that go nowhere; and what appears to be several blog entries from November and October (It's June) that don't link to anything.
EZLoanProtection.com's home page offers "SKIP PAYMENT," "LOSS OF JOB" and "EASY CASH NETWORK" services, the latter of which promises to "put interest-free money back in your pocket through its vast network of lending, insurance, debt consolidation, and tax savings institutions," but on it's "Solutions" page, it lists only two generic names from it's "vast network":
"Here are few companies we work with
Extra Cash
Network Loan Solutions"
The "company names" are not hot linked.
Also, on the home page, the site says, "Skip Payment and Disability coverage -- up to $500 per loan amount. For literally pennies over the life of your loan you can be protected. And for your convenience, we'll add the amount to the loan's principal outstanding balance."
Those Terms and Conditions are either very poorly conceived and written or purposely vague and confusing.
On the Terms and Conditions page, a "Payment Assistance" service (also found on the "Solutions" menu page) says, "In the event you are unable to meet your scheduled payment obligation with your loan provider(s) due to loss of income or financial hardship, please fill out the form on this site LEAST 5 DAYS PRIOR to your payment due date. You are eligible for assistance with up to THREE CONSECUTIVE PAYMENTS or a maximum benefit amount of up to $79. YOU will need to make arrangements directly with your loan provider(s) should you choose to defer your loan, or pay penalties due to delaying your payment, as we will mail the Payment Protection Plan benefit payment directly to you within 7-10 business days of receiving your request and your premium payment of $30"
EZLoanProtection.com's confusing Terms and Conditions also do not fully disclose interest rates, APRs, total "protection" costs or real, detailed loan terms.
It offers an online "Loan Request" form asking for name, address, email, phone number, "Payment Location, Payment Due Date, Amout due, Original loan amount, and Payments to date.
Silence isn't so golden
The online company didn't respond to an email request for an interview and several calls to a number listed on the Web site were dropped before getting through.
When someone finally answered, he said, "We are not EZ Loan Protection. We help with one of their services. We are a customer care company that works with dozens of Internet companies," and then suggested I talk to his supervisor and forwarded me to a "Mike," -- voicemail.
We left a message, asking for their side of the story, explained we were on deadline and left "Mike" a contact number.
He had not returned the call at deadline.
If it walks like a duck, quacks like a duck, it's a good chance there's a bill of goods involved.
