News & Resources

Woman charged 1,052 percent interest

Feb 02, 2011 Todd Milner

A Seattle-area woman believes her short term loan company charged her exorbitant fees on the money she borrowed, reports NorthWest Cable News. The lawsuit claims that the short term loan company charged 1,052 percent interest and is violating new restrictions on this type of nontraditional credit line in Washington State. The company says that it is selling merchandise, not loans, because it sells supermarket gift cards and prepaid debit cards and is not subject to short term loan regulations. Less than a year ago, the woman says she bought $850 in gift cards and has paid back nearly $600. However, the company is telling her that she still owes $600 in principal and $1,520 in fees and interest. This consumer's experience is a warning to all who need the assistance of short term loans or other forms of lending. It is important to read the fine print before agreeing to any loan, and consumers should make sure to only borrow what they are capable of paying back in a timely manner. Any short term lender, whether at a storefront or online, that does not properly indicate the fees and interest rates associated with borrowing money is a business consumers should be wary of. Reputable short term lending companies will be upfront about all costs.