Hidden Fee Lurks in Online Payday Loans

Friday, June 08, 2007

The EverPrivate Card is a scam targeting people seeking payday loans over the Internet. During the payday loan transaction, customers are duped into accepting the EverPrivate Card and the company takes $49.95 out of the applicant’s bank account. In many cases, a $49.95 debit is taken without the borrower’s knowledge that they ever agreed to pay for the dubious “service” the company provides. The $49.95 fee is for a service that, according to the company, is “the only way to shop online without anyone else knowing.”

Payday loans are bad enough. They routinely charge 400% annual interest, don’t follow lending laws and place people struggling financially on a debt treadmill that can take months or years to get off of. [Click here to download a PDF report, “Payday Lenders Evade Regulations.”] Payday lenders recently were banned from doing business in Georgia, and others states like New Mexico have imposed tighter regulations on the industry.

Numerous online companies like 121cashadvance.com, thinkcash.com, and many others now function as payday loan brokers. These companies unite desperate borrowers with predatory payday lenders that offer 400% APR loans. The people at Everprivate Card running the scam have arrangements with many online payday loan brokers to automatically enroll applicants for the bogus $49.95 “service” and to forward to Everprivate Card the applicant’s bank account information. Then the company goes into the victim’s bank account to grab its fee, which often triggers bank overdraft fees for the victim.

Some of the payday brokers in bed with Everprivate Card strike a pose as lending money “the Christian way.” Christian Faith Financial, one of the companies, sports the slogan, “Be not overcome with evil, but overcome with good, Romans 12:21” on its website.

Guess they must have skimmed past Proverbs 22:7 (“The borrower is servant to the lender”), Leviticus 19:35 (“Use honest scales and don’t cheat when you weigh or measure anything”), and Exodus 22:25 (“Don’t charge interest when you lend money to any of my people who are in need”), because there are few things lower than ripping off the poor.

What do customers get for the $49.95 charge? It’s not altogether clear. Some of the partner sites repeat the claim that “The EverPrivate Card is the only way to shop online without anyone else knowing.”

But amazingly for a company claiming to be in the business of online privacy, Everprivate Card collects your “name, mailing address, e-mail address, and date of birth.” It also bugs your computer with Clear Pixel GIFs, or “web beacons,” and collects information on your IP address, operating system, type of browser and web site activity. But that’s not all: the company also admits that “we may sell the personal information that you supply to us” to others.

If you’re looking for web privacy, the Electronic Privacy Information Center has put together a huge collection of privacy resources.

If you’re looking for a payday loan, consider credit unions and other alternatives outlined in this Center for Responsible Lending brief, “Alternatives to Payday Loans.” A 2006 article in USA Today examined credit unions as an alternative to payday loans.

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