Unlicensed lenders continue their illegal schemes, targeting and preying upon desperate Minnesotans. The illegal interest rates they offer have become a problem so much so that the Minnesota Department of Commerce once again is warning consumers to beware, be alert and not fall for their pitches.
Minnesota Commerce Commissioner Steve Kelly urges consumers not to be enticed by online lenders that promote installment, short-term or payday loans because they likely charge illegal and astronomical fees and interest rates well beyond what state law allows.
Avoid their exorbitant interest rates
These predatory lenders also resort to what is known as a “rent-a-bank” scheme in which they team with out-of-state banks to avoid interest rate limits in Minnesota. Chartered banks outside of Minnesota likely charge much higher interest rates. Consumers must be suspicious, otherwise they may find themselves falling into a money pit of excessive and overwhelming interest.
Here are some things to remember:
- Research everything about the lender. You may find things that do not add up. Look online for any scam-related warnings. And make sure the lender is licensed in Minnesota.
- Carefully read every detail about the loans, its costs, fees and interest rates. If the lender fails to provide a contract, you know this is a scam.
- Pursue a loan from your personal bank or credit union.
- Reach out to creditors to seek loan extensions or talk with them about a new repayment plan.
- Seek credit counseling. This represents a significant step in getting off the treadmill of financial difficulties.
- Contact a skilled legal advocate, ready to fight for you if you are a victim.
Please avoid borrowing from these so-called companies. These are scammers that prey on the most financially vulnerable members of the public. Do not listen to them and do not fall for their illegal tactics.