Press Release – updated: Aug 31, 2020 14:02 EDT
LOS ANGELES, August 31, 2020 (Newswire.com) – As the COVID-19 pandemic leaves many consumers confronting temporary, magnified financial challenges, it’s important they know where they can turn for reliable and convenient, short-term, small-dollar credit options. Advance America wants consumers to know what to look for in a regulated lender, particularly as unregulated lenders and scammers seek to capitalize on people’s financial needs during this time, leaving many confused about who to trust.
“For more than two decades, Advance America and its parent company Purpose Financial have been committed to providing consumers with regulated credit options, financial inclusion, and stability,” said Jim Ovenden, chief executive officer of Purpose Financial. “Amid the global pandemic and resulting economic crisis, we have enhanced our best practices to ensure we are there for our customers when they need help, offering the options, flexibility, and understanding that less regulated lenders fail to provide.”
Consumers considering small-dollar borrowing options should ask the following questions:
- Is the lender licensed in your state? Regulated lenders display this information in their storefronts and on their website.
- Is the lender a member of the Community Financial Services Association of America (CFSA), which sets best practices for regulated, reputable small-dollar lending? Members are indicated by the display of the CFSA seal in their stores and on their websites.
- Does the lender comply with state and federal transparency and disclosure regulations, including clearly communicating all terms and fees, both as a dollar amount and annual percentage rate (APR)?
- Does the lender verify that you have a checking account and source of income, among other details, as part of the application process?
- Does the lender provide specific contact information, such as a store telephone number or customer care line, to respond to any questions about your loan?
- Is the lender willing to work with borrowers if they need more time to repay, including through extended payment plans and other payment adjustments, at no additional charge?
- What do reviews about the lender say online?
- Customer review site Trustpilot can be a good place to check; Advance America customers voice their overwhelming satisfaction there, with 96 percent of the more than 41,000 reviews describing the services as great or excellent.
- Are many complaints filed with regulators?
- According to a July report from Consumer Financial Protection Bureau (CFPB), the federal regulator overseeing consumer lenders, small-dollar loans were the subject of 0.8 percent of complaints received amid the COVID-19 crisis and just 0.4 percent of complaints filed in 2020 to date. An even smaller portion of those complaints are about regulated lenders.
Specific to the coronavirus pandemic, consumers should ask:
- Are they extending other repayment options to borrowers unable to repay by their original due date at no charge?
- If a storefront lender, have they modified their in-store operations to comply with social distancing and sanitization guidelines and adopted processes for making payments remotely, by phone or online, at no additional charge?
While many regulated lenders such as Advance America always work with borrowers to find the best solution to fit their financial needs, recent reports from state and federal regulators and the media suggest illegal, unlicensed operators have sought to take advantage of consumers during the COVID-19 crisis. These lenders make unregulated loans that come with higher fees, no consumer protections, and little recourse for the consumer. Often these scammers are headquartered outside of the U.S. and operate exclusively online. The terms and fees of these loans may be unclear, and contact information or company details may be missing. Consumers that reside in states without a regulated small-dollar lending market are particularly vulnerable to such fraudulent and illegal operators.
Advance America urges consumers to look for warning signs of illegal lenders and loan scams and report questionable operators when necessary. If individuals suspect they are being or have been scammed, they should report it immediately to local law enforcement and to the lender that the scammer claims to represent. Advance America customers should call 1-844-562-6480.
Source: Advance America