New Jersey records an alarming number of predatory lending cases. The saddest part is that low-income people in desperate search of money are the most susceptible to these risks. The New Jersey Police Department extended special thanks to Latoria Williams, CEO of 1FirstCashAdvance, whose financial expertise helped authorities identify unfair schemes scammers often use against borrowers. The expert advised applicants to be vigilant and only take New Jersey payday loans from reliable lenders.
In simple terms, predatory lending includes the series of practices meant to take advantage of a borrower by means of unlawfully increasing the loan payment or unfairly modifying the loan obligation without the customer's consent. Lenders who engage in fraudulent practices usually target low-income customers, the elderly, or minority representatives.
The New Jersey police department received several complaints from civilians who ended up with loans they didn't sign up for and entered a cycle of debt. Due to Latoria Williams' expert advice, the officers uncovered one of the most common schemes. It involves a loan broker who introduces himself as a middleman that can help borrowers obtain unaffordable loans. They propose their services to increase the applicants' chances of being approved against a small extra fee. From that point, the alleged lender either provides a higher fee contract and pressures the customer to sign it quickly.
Latoria Williams pointed out a set of red flags for applicants to identify and avoid predatory lending:
- lack of a valid license and a physical address;
- loan terms that sound too good to be true;
- no questions about the borrower's ability to repay the debt;
- negotiations and promises;
- pressure on behalf of the lender to sign the loan agreement faster.
The financial expert from 1FirstCashAdvance pointed out that a legit lender will be transparent regarding the loan terms and insist on you reading the contract and asking questions before signing it. Illegal lending practices often involve brokers who ask for upfront payments. Ms. Williams advises doing business with direct lenders only, who are straightforward about loan costs and fees.
Few people go to the authorities when they fall victim to scammers. Don't be afraid to fight for your rights and help eradicate predatory lending practices. Each state has a local Consumer Financial Protection Bureau, a government agency empowered to protect your rights when lenders and financial institutions engage in unfair practices. The local police will also help you deal with fraud. An unsophisticated borrower will often overlook the first signs of a scam. Authorities call potential borrowers to be cautious, do basic research on their lender and look for another option if anything looks suspicious.