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Payday loan is a controversial issue. Some people do not hesitate to take it, while the others cannot even bear the idea of taking any payday loan. And they have every right to do it, because of all the news and talks about organizations that provide such loans. So, if you are going to have a payday loan you should study information about this organization beforehand.
No one wants to be deceived especially when it comes to our money and taking loans. We are trying to act as careful as we can, but unfortunately it is not always possible. We fall into the trap and stay duped. Usually it happens because we do not study all the information about the organization that provides these loans. The first thing we should do before borrowing money is to check all the information about the organization and payday loans in general and find out if you can trust this organization or not.
Check if Native Americans are involved in the organization
It is said that some payday lenders in America use sovereignty of Native Americans to avoid consumer protection laws. It is really useful for lenders who want to breach the law, because the sovereignty of Native Americans prevents them from being sued for violating consumer protection laws. And if an organization wants to earn a little bit more money on their clients, its head just has to find a tribe and ask for help.
You may have a reasonable question: why do tribes need this? The answer is very simple: money. Of course, they enter into such business to get some money from it. The statistics says that one out of four Native Americans is living in severe poverty. That is why they are ready to earn some money even if the way of getting it is not quite fair. But in fact, a tribe usually gets only one per cent from the average revenue of a company. It is not a big sum in comparison with the revenue of a company that can be more than several millions of dollars.
In what way does it violate the law?
According to Public Justice Report, some payday loan organizations provided loans with an interest rate higher than 700 per cent. The organizations knew it, but they could not be judged by court, because an accused organization formally looked like tribal business and its activities could not be sued according to the local consumer protection laws. And the organizations continued to take profit from their existence.
These details were opened when the police started to investigate the case of Scott Tucker. Scott Tucker used to be a race driver and an owner of some payday loan organizations at the same time. He has been recently sentenced to more than sixteen years in prison for illegal loan practices that affected about four and a half million customers. According to the documents, Tucker’s companies were affiliated with the Miami Indian tribe of Oklahoma.
In fact, sometimes leaders of the tribes which names are used by payday lenders do not even know of that. It happens because a lender needs approval of just one member of a tribe to use its name. And there are cases when the heads of the tribe did not agree to take part in this business, but anyway they participated in it without even knowing about this fact, because of the agreement with one of the tribe members.
Many people can assure you that payday loans are absolute evil and such loans are not worth being trusted, but actually payday loans cannot be called so. As in every business there are companies that are not so light-fingered. You as a customer and user of these loans have to think of your safety and find out as much information about the organization you want to borrow from as possible. Except for the information about the address of the company, its reviews and reputation, you have to find out who the head of this company is and check if it is affiliated with any tribe.