This Check In The Mail Isn’t Just A Check, It’s A Predatory Loan | New

If you ever get a check in the mail from a lender offering to help pay your bills, don’t cash it! What most people don’t realize is that if you cash the check, you are accepting a high interest loan.

Predatory checks nearly bankrupted a Hampton couple.

Tony and Glena Compton are two very lucky people. By this time last year Tony wouldn’t be around playing his guitar, he would pawn it. The Comptons were in debt and it only kept increasing.

“It’s the devil to go through, I mean you have to worry all the time and it’s not worth it,” he says.

It all started with a visit to the letterbox and a letter accompanied by a check. The Comptons live on a tight budget, but with unexpected bills, he saw the check and relief. He just had to go to the bank.

“I looked at it really well, I said this thing, I can cash it, I’m going to cash it and make payments,” he says.

Of course, he knew it was a loan, but this loan was something else. No credit check is required, just a check in the mail with interest rates up to 60%.

In 2012, Ralph Hudgens, the state’s insurance commissioner, gave the green light for a small group of lenders to target low-income families with what the industry calls live checks.

If you talk to consumer watch groups like Georgia Watch, they’ll tell you it’s predatory lending at its lowest. It is a practice that could easily be stopped.

Earlier this year, State Senator Elana Parent sponsored a bill to ban online checks. The Comptons testified before the state finance committee, but the bill got stuck in committee. Parent says she will reintroduce the bill in the next session.

The Comptons were in so much debt that they began to convert one loan into another. Eventually, lender Republic Finance sued the Comptons. Luckily for them, two attorneys, Joel Thrift and consumer rights lawyer Matt Weatherington, intervened for free.

They gave us credit.

“The only reason this has been as favorable as it has been is your leadership on this issue, and we thank you very much for your involvement.”

While we cannot release the terms, we do know the Comptons have settled the matter. They’re happy and they want everyone to know that if you get one of those live checks in the mail, throw it out.

If you’ve got a live check and you’re stuck on a 30, 40, or 50 percent loan, we want to hear from you. Call me at (404) 327-3030, or by email [email protected].

Copyright 2017 WGCL-TV (Meredith Corporation). All rights reserved.

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