These places have the appearance of legitimacy because they are legitimate.
"The pitfalls of borrowing from storefront payday lenders -- companies that offer short-term loans with high interest rates -- are already well-documented. Regulators and consumer groups have long warned such loans can trap people in vicious cycles of debt. Less is known about online payday lenders, which offer the same service with the added allure of the transaction happening completely on the Web.
Consumer groups say these types of lenders may be even riskier for struggling borrowers than brick-and-mortar lenders, leading consumers into even more hopeless financial quagmires.
“They loan to people not even caring whether they can pay the whole thing off,” said Jay Speer, the executive director of the Virginia Poverty Law Center. “They just want a certain amount every couple weeks -- as much as they can beat out of you until you default.”
Payday Lenders Are Using The Internet To Evade State Law
"Earlier this month, Manhattan District Attorney Cyrus R. Vance, Jr. brought charges against a Tennessee-based businessman and the 12 companies he allegedly created to offer payday loans to New Yorkers at illegally high rates.
With one website, MyCashNow.com, based in the West Indies and others incorporated in various states, Carey Vaughn Brown is accused of trying to escape legal regulations and usury laws. New York usury laws cap loan interest rates at 25 percent, but prosecutors say Brown’s companies extended loans with rates that ranged from 350 to 650 percent.
Brown is also accused of disguising the fact that that his companies would oversee an entire loan process. For example, a borrower would apply for a loan on one website Brown owned, their information would be transferred to another company that extended the loan and a third company would collect payments. By managing all of the companies involved in the loan lifecycle, prosecutors say that Brown could profit off of expensive loans in states that banned them. Chief operating officer Ronald Beaver and legal counsel Joanna Temple have also both been indicted."
https://blog.creditkarma.com/news-t...ay-companies-for-breaking-interest-rate-laws/
"Aggressive collection practices[edit]
In US law, a payday lender can use only the same industry standard collection practices used to collect other debts, specifically standards listed under the Fair Debt Collection Practices Act. The FDCPA prohibits debt collectors from using abusive, unfair, and deceptive practices to collect from debtors. Such practices include calling before 8 o'clock in the morning or after 9 o'clock at night, or calling debtors at work.[27]
In many cases, borrowers write a post-dated check (check with a future date) to the lender; if the borrowers don't have enough money in their account, their check will bounce.
Payday lenders will attempt to collect on the consumer's obligation first by simply requesting payment. If internal collection fails, some payday lenders may outsource the debt collection, or sell the debt to a third party.
A small percentage of payday lenders have, in the past, threatened delinquent borrowers with criminal prosecution for check fraud.[28] This practice is illegal in many jurisdictions and has been denounced by the CFSA, the industry's trade association.
Pricing structure of payday loans[edit]
The payday lending industry argues that conventional interest rates for lower dollar amounts and shorter terms would not be profitable. For example, a $100 one-week loan, at a 20% APR (compounded weekly) would generate only 38 cents of interest, which would fail to match loan processing costs. Research shows that on average, payday loan prices moved upward, and that such moves were "consistent with implicit collusion facilitated by price focal points".[29]
Consumer advocates and other experts argue, however, that payday loans appear to exist in a classic market failure. In a perfect market of competing sellers and buyers seeking to trade in a rational manner, pricing fluctuates based on the capacity of the market. Payday lenders have no incentive to price their loans competitively since loans are not capable of being patented. Thus, if a lender chooses to innovate and reduce cost to borrowers in order to secure a larger share of the market the competing lenders will instantly do the same, negating the effect. For this reason, among others, all lenders in the payday marketplace charge at or very near the maximum fees and rates allowed by local law.[24]"
Payday loan - Wikipedia, the free encyclopedia
Anyone in business with these types of practices, I don't consider legitimate.
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