Maine Regulators Warn About Internet Lenders
AUGUSTA, Maine - Not a day goes by that the state Bureau of Consumer Credit Protection doesn't get contacted by a Mainer that has a complaint about an Internet-based lender that is using harsh - and often illegal - tactics to collect on a loan.
"Hundreds, and probably thousands, of Mainers every year get on the Internet and take out Internet-based payday loans," says Will Lund, superintendent of the bureau. "These are loans from lenders who are not licensed."
Lund says these unlicensed lenders often charge interest rates higher than allowed by law, and charge other fees that are not disclosed when the person takes out the loan
He says when borrowers get behind on payments, they are often threatened by the lenders with such action as arrest, which is illegal.
Because they are often based in other countries, Lund says there is little his agency can do to help consumers, other than urge them not to use lenders that are un-regulated.
"The collectors frequently threaten prejudgment garnishment, they threaten immediate litigation, they threaten even arrest on occasion," Lund says, "and all of those should raise red flags because they simply are nor remedies available to any creditor in the state of Maine."