Apparently. Debt collectors in New York agreed to a settlement of almost $300,000 for collecting on loans with interest rates that violated the state’s ban on high interest rates. The types of loans in question are short term, pay day loans. These types of loans are notorious for carrying high interest rates. One of the lenders involved in this matter was Western Sky, who reportedly charged as much as 355% on short term loans, which is much higher than the state’s 16% cap.
Many people fall on hard times between pay periods and are forced to take out short term, pay day loans to bridge the gap. However, most consumers are unaware that such loan products carry extremely high interest rates making repayment difficult and expensive. These borrowers end up paying back substantially more money than they borrowed, and if they default are forced to deal with very aggressive collection agencies. Consumers that have taken out such loans and are now finding it difficult to repay them should contact a qualified debt settlement attorney immediately to find out their options. A qualified debt settlement attorney can stop the harassment, and likely negotiate a reasonable repayment option.