Beware Of Internet 'Payday Loans'

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Consumer advocates warn that some of the world's most dangerous loan sharks have found a new way to get people's money -- they're going on the Internet.

The Consumer Federation of America says the Web hosts hundreds of sites offering something called a "payday loan."

The loans can last just a few days and charge 25 percent or more in interest. Generally, people get the loans by writing a check that gets cashed on their payday. But on the Internet, borrowers don't write checks. Instead, they give the loan company all of their bank information electronically.

The Consumer Federation of America says that leads to two serious problems: the borrowers still pay interest of about 650 percent annually, and they give the lender control over their bank accounts.

The organization says if you need money, avoid such loans at all costs.

  • Bootie Cosgrove-Mather

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