December 4, 2022
It has been a tough few years for many Americans. Unfortunately, trying to stretch every dollar to buy the necessities has become the norm. Some might look into a second or third job to pay the bills.
This is precisely the type of person that payday loans are targeting. Promising quick cash without telling the whole story of the loan costs, these advertisements have been popping up on social media platforms like TikTok.
Read on to find out how these companies skirt the rules and why taking a payday loan is bad.
All social media platforms have advertising, as it’s a primary way to bring in a profit. But some sites aren’t as strict about ad content as others. For example, TikTok claims to have a policy against “exaggerated performance or promise.”
Yet, there are plenty of payday loan posts that target vulnerable users. According to Media Matters for America, three companies consistently violate TikTok’s advertising policies by promoting payday loans.
By promising instant money, the posts from Earnin, Brigit and Albert target those who need cash in a hurry with wording such as “living from paycheck to paycheck” or being always “broke.” It is unclear how the advertising is allowed to be on the platform.
But Earnin is no stranger to controversy. The company settled a $12.5 million lawsuit over deceitful lending practices three years ago. Brigit and Albert are also not registered with the Better Business Bureau (BBB), as some users claimed there were unexpected fees or missing deposits.
It might seem like a lucrative opportunity to quickly get some cash in your wallet, but there will always be a catch. The interest rate will be exorbitantly high, and they don’t call it that often. Some advertising will use words such as “fee” or “tip” without mentioning the interest rate.
According to the Consumer Financial Protection Bureau, a two-week payday loan with a $15 fee to borrow $100 gives you an annual percentage rate of 400%. That’s far higher than the typical 30% of a high-interest credit card.
That can leave you in a debt cycle, but according to the BBB, there are safer alternatives to payday loans:
These family plans will save you money – even if you aren’t family
Check if you have any of these outdated gadgets selling for big money on eBay
More:
Navigating the digital world can be intimidating and sometimes downright daunting. Let me help! Reach out today to ask your digital question. You might even be on my show!


source

Leave a Reply

Your email address will not be published.