Blog

Payday Loans, Illegal on the Street, Thrive in New York’s Cyberspace

Author By John Sandman

Robert Bradley, of Jamaica, Queens, a 64-year-old hospital worker, had been low on cash and neglected to pay the first ticket, then the second – and soon he was worried that his car would get towed. “I took out a payday loan thinking that would solve the problem,” he says. He started with a single loan for $300 from PDL Loans, also known as Piggy Bank Cash Loans. The company’s address is in Nevis, West Indies, but Bradley easily found it on the Internet. Then, as now, the site promised rapid approval – and money in his checking account in a matter of hours.

That was in . As is often the case with payday borrowers, Bradley’s finances were already fragile. He was focused on the cash he needed then, not the consequences he’d face later. He paid off the first loan on July 9 – $390 for a $300 loan – and took out another $350 on e lender. This time PDL seemed to withdraw payments from his account at random, and never enough to pay off the loan. As costs for that loan ballooned, he needed even more money. He took out a third loan in August, which led to two more in September. By December he had taken out a total of 11 loans from 10 different online lenders.

Bradley thought each loan would be straightforward. “It was supposed to be a one-shot deal,” he says. “I got the money in one shot, I’m gonna pay it off in one shot. It wasn’t supposed to go on month after month.” Bradley, who received his paycheck via direct deposit, expected each lender to electronically deduct the full balance of his loan from his checking account two weeks after the loan was made. But by his account, based on a review of his bank records, each lender withdrew less than the full amount of the loan, making successive deductions that were never enough to bring his balances to zero. To Bradley, the withdrawals had no rhyme or reason, and they had the effect of pushing him further into the hole as fees, penalties, and interest piled up.