Payday Loan Pitfalls - Atlanta News, Weather, Traffic, and Sports | FOX 5

FOX 5 I-Team

Payday Loan Pitfalls

Posted: Updated:
ATLANTA -

A new study reaffirms what financial experts keep saying:  Payday loans are simply a bad idea. They trap the already financially vulnerable.

In Georgia, payday loans are illegal, but people still get taken. How does that happen? Well, according to the Governor's Office of Consumer Protection, through the Internet where lenders easily cross state lines. 

So, if you're tempted, let's go to this latest study from the Consumer Financial Protection Bureau. People take out these ultra, high interest loans in credit emergencies and plan to pay them off quickly, but often they don't. 

The study says four out of five payday loans are rolled over or renewed within two weeks.  About half of these loans last more than 10 months.  The study shows that many borrowers renew the loans about seven times. This is how it adds up: Seven times means you'll pay more in fees than you originally borrowed.

That's if the lender is playing by the rules. The  Consumer Financial Protection Bureau looked at 12 million loans and finds that a troubling number of payday lenders engage in what it calls unfair or deceptive collections practices like threats or fuzzy math.  And what ends up happening is that this person already in a vulnerable financial situation ends up in a cycle of debt that's hard to climb out of.

  • I-Team Story ArchiveMore>>

  • Mom confronts Ray McBerry over modeling request

    Mom confronts Ray McBerry over modeling request

    Monday, July 28 2014 10:31 PM EDT2014-07-29 02:31:15 GMT
    A twice-failed candidate for Georgia governor found himself face-to-face with a mother furious over what he was trying to do this month with her teenage daughter.
    A twice-failed candidate for Georgia governor found himself face-to-face with a mother furious over what he was trying to do this month with her teenage daughter.
  • Unresolved bank errors? Help is on the way

    Unresolved bank errors? Help is on the way

    Monday, July 28 2014 8:11 AM EDT2014-07-28 12:11:30 GMT
    Taking on a big bank, even over something like a minor bank error, can be maddening. You feel like no one is listening. It's like being trapped in a maze you can't get out of, but somebody is noticing how frustrating that can be.
    Taking on a big bank, even over something like a minor bank error, can be maddening. You feel like no one is listening. It's like being trapped in a maze you can't get out of, but somebody is noticing how frustrating that can be.
  • I-Team Investigation

    Former Douglas Co. D.A. office manager indicted

    Former Douglas Co. D.A. office manager indicted

    Sunday, July 27 2014 3:24 PM EDT2014-07-27 19:24:49 GMT
    There are major new developments today in the state investigation of the Douglas County District Attorney's office. Tammy Agan, the former office manager, has been indicted on 58 counts of theft and making false statements.
    There are major new developments today in the state investigation of the Douglas County District Attorney's office. Tammy Agan, the former office manager, has been indicted on 58 counts of theft and making false statements.
  • Contact the FOX 5 I-Team

    * denotes required fields

    We're sorry, but only one entry is allowed per person.
    Thank you for your continued interest.

    Thanks for contacting FOX 5.  To reach our newsroom by phone, please call (404) 898-0100.

  • Good Day ArchiveMore>>

  • Back to School Jamboree with Hosea Feed The Hungry

    Back to School Jamboree with Hosea Feed The Hungry

    Hosea Feed the Hungry will host their annual Back to School Jamboree on Sunday, July 13, 2014 from 10:00 a.m. until 3:00 p.m. at Turner Field. Children will receive a backpack filled with school supplies.

    Hosea Feed the Hungry will host their annual Back to School Jamboree on Sunday, July 13, 2014 from 10:00 a.m. until 3:00 p.m. at Turner Field. Children will receive a backpack filled with school supplies.

  • Sandy Springs Park presents "Touching" art display

    Sandy Springs Park presents "Touching" art display

    Monday, July 28 2014 8:57 AM EDT2014-07-28 12:57:44 GMT
    For many area students and teachers, school starts next week.  So this week on Good Day Atlanta, we're checking out "cool" spots to
    For many area students and teachers, school starts next week. So this week on Good Day Atlanta, we're checking out "cool" spots to enjoy those last few days of summer.
  • Pet 'matchmaking' service increases adoptions

    Pet 'matchmaking' service increases adoptions

    Monday, July 28 2014 8:13 AM EDT2014-07-28 12:13:37 GMT
    You've probably heard of a match-making service that helps people find their soul mates.But you may not know that there's a nonprofit in Atlanta that offers a similar service....for people to find....the perfect pet.
    You've probably heard of a match-making service that helps people find their soul mates.But you may not know that there's a nonprofit in Atlanta that offers a similar service....for people to find....the perfect pet.
Powered by WorldNow

1551 Briarcliff Rd., NE
Atlanta, GA 30306

Main Number: (404) 875-5555
News Tips: (404) 898-0100

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices
.