Loan Company Targets Desperate Borrowers

11:33 PM, May 9, 2012   |    comments
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Piedmont Triad, NC -- It's not exactly a scam and it's even legal in some states but an advertisement for an emergency loan running here in the Triad is raising lots of red flags.

The ad plays right to people who have fallen on hard times or are faced with an emergency and need quick cash.

"Western Sky can put $5,000 in your checking account by tomorrow," a spokesperson in one version of the ad says.
She goes on to declare that the company's loan is cheaper to pay back than a payday advance.

But that's if you don't read the fine print.

News 2 played the ad for the Better Business Bureau Wednesday afternoon and Kevin Hinterberger, president of the Greensboro BBB, tells us the red flags are not hard to miss.

"Some of the red flags: quick turnaround, a lot of money, no collateral, sounds too good to be true," he said. "Here in the fine print, the interest in a typical $5,000 loan is 116%. That's pretty steep. To charge a person 116% for a loan is unethical and that's just my opinion."

The 116% interest rate is one of the lowest Western Sky offers. Compare that to the average personal loan interest rate in NC, which is under 12 percent.
That means if you borrow $5,000 over 84 months you'll end up paying more than $40,000 to Western Sky.

"If you do business with these folks and you have a problem and you're seeking some type of resolution, you're going to have a very difficult time," said Hinterberger.

That's because the company claims it's based on a Native American reservation and our state laws won't protect you there even though pay day loans are illegal in North Carolina.

So far, the BBB has 193 complaints against the company.

The North Carolina state attorney general's office also notes that they have 13 complaints on Western Sky.
The office has put together a list of tips to help you identify shady loans. Click here.

 

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