(Washington, DC) —The District of Columbia Department of Insurance, Securities and Banking (DISB) today warned District residents need to be wary of online payday lenders who are not licensed to do business in the District of Columbia.
“Since the payday lending law had been amended, we have seen an increase in the number of unscrupulous persons trying to take advantage of residents in other venues, namely the Internet,” said DISB Commissioner Thomas E. Hampton. “It is illegal for a lender—through a website or in person—to offer a payday loan in the District of Columbia without being licensed to do business here.”
The Payday Loan Consumer Protection Amendment Act, which came into effect January 9, 2008, prohibits lenders from charging more than 24 percent annual interest on loans in the District of Columbia, effectively rendering payday lending unprofitable. As a result, the six firms previously licensed to engage in payday lending have all ceased activity in the District, thus creating an opening for others on the Internet.
A payday loan (also known as a paycheck advance) is a small, short-term loan typically used by a borrower to cover expenses until his or her next pay check.
Some payday lenders make loans available illegally to District residents, mainly over the Internet. These lenders may charge a borrower as much as 2,000 percent interest, take payments from a borrower’s checking account without authorization, or initiate harassing telephone calls.
The following websites are not licensed to offer payday loans to residents in the District of Columbia:
The telephone number that services these sites is (800) 654-7444. Other toll free numbers are also used to solicit loans and receive faxes.
If you have questions or believe you have been a victim of fraud, please contact DISB at (202) 727-8000 and ask for the consumer complaint staff in either the Banking Bureau or the Enforcement and Investigation Bureau, or visit our website at disb.dc.gov.