Payday Lender Charged with Improper Disposal of Customer Data
A press release from Illinois’ attorney general’s web site notes that an Illinois payday lender, Payday Loan Store, has been accused of dumping consumer’s sensitive information in trash receptacles outside several locations. Lisa Madigan, the attorney general, is reportedly suing the company for “allegedly failing to safeguard consumer data.”
Here’s a look at the details and what you need to know to keep your information safe.
Sensitive Documents Found in Trash
Reports indicate that various documents, including highly sensitive consumer information, were discovered in trash bins outside some Payday Loan Store locations.
- Enough information to allow identity theft: Police reportedly found documents that included customers’ Social Security Numbers, bank account numbers, canceled check information, credit counseling history and more.
- Earlier promises to protect such information: According to sources, Payday Loan Store guaranteed customers that it would protect their sensitive information. The discovery in the trashcans suggests a breach of both that promise and federal law.
- Fine and penalties sought: The press release notes that Madigan will seek a civil penalty of $50,000 from Payday Loan Store for each incident of improper handling of consumer information. Further, Madigan apparently hopes to permanently bar Payday Loan Store from engaging in deceptive and unfair practices.
More Dangers to Payday Loans?
The news of this improper data handling adds a new element of danger to the already risky short-term, high-interest loans offered at outlets like Payday Loan Store. If you’re contemplating taking out a payday loan, consider this:
- State laws have banned or limited them: In recent years, payday lenders have been outright banned or severely restricted in many states.
- They come with sky-high interest rates: In those states where payday lenders still operate freely, associated fees on cash loans are equivalent to interest rates up to 390 percent.
- They’re excellent debt-cycle promoters: While most people who take out payday loans fully intend to repay them in full at their next payday, the majority of payday lending customers end up in multi-cycle debt traps, paying far too much for the short-term loans they’re getting.
As if all that weren’t reason enough to avoid payday lenders at all costs, Attorney General Madigan’s new suit suggests that the dangers of borrowing from a payday loan store could include identity theft. Yikes.
So what should you do if you’re in need of quick cash and can’t get a loan from a traditional source? Many financial insiders recommend pretty much anything besides a payday lender: asking for a loan from friends and family, asking for a paycheck advance, selling unwanted household items, selling blood or plasma, applying for a new credit card, etc.
And, if you’re really strapped for cash and feel like you’re at your wits’ end trying to make ends meet, now might be the time to consider filing for bankruptcy.
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