Some stores responded by suggesting that instead of a payment plan, the caller could just take out another loan. Steve Schlein with the CFSA told CBS News, "The Extended Payment Plan is available to customers who cannot pay the loan when due, not to random callers who don't even have a loan."įor the 20 stores who responded that they did have an extended payment plan, most indicated customers could use it only after four consecutive loans and only once a year which in some states is the law.Īt an Advance America in Charleston, South Carolina, "We do offer an extended payment plan, but you can only do it once a year. In response, Jamie Fulmer, spokesperson for Advance America told CBS News, "We don't sell extended payment plans, that is not our product, our product is a payday advance." Fulmer says every customer who takes out a loan gets a brochure that mentions the extended payment plan.Ĭheck 'n Go sent CBS News their extended payment plan policy but the company says it is not posted on their Web site for their customers because, "It could be confusing and misleading to our customers," due to different state laws, "and may explain the responses your staff received from our stores."Ĭash America says its policy is the same as the rest of the industry but would not answer questions as to why some of their employees were unaware of the policy. When you come in to take out the loan you have to sign a contract saying you're going to come in and pay the loan in full on your next payday." And in Arlington, Virginia, "No, you have to pay it back on your payday. The Advance America website states: "If a customer is unable to pay back an advance within the arranged timeframe, Advance America offers an Extended Payment Plan to allow customers a longer time period to repay at no additional charge."īut at the Advance America store in Ames, Iowa an employee said, "No, we don't really do payment plans. ![]() Over time, the $45 every two weeks adds up and customers who stay in this cycle for a year find the annual interest rate is over 300% and they have paid $1170 in interest for the original $300 loan. But two weeks later when their next payday arrives and they pay off the loan, they find they cannot afford to live on what is left, so they take out another loan at $345. ![]() Here's how problems can begin: a customer needs extra money and takes out a typical $300 advance on their paycheck along with 15% interest at $45. ![]() have taken steps to effectively ban the industry.įor those who pay off the loan with their next paycheck, a payday loan can be a boon. CBS News Investigative Producer Laura Strickler wrote this story for with additional reporting from Lauren Zelt.ĬBS News reported this week that the payday loan industry uses aggressive sales tactics to lure customers into payday loans that can trap borrowers in a revolving cycle of debt.
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