BANKTHINK

The Automatic Debit That Can't Be Turned Off and Other Consumer Loan Nightmares

Receiving Wide Coverage ... Consumer Debt Traps: The lead front-page story in Sunday's Times examined large banks' role in supporting online payday lenders that get around state interest-rate restrictions by locating offshore. At issue is the banks' automatic debiting of borrowers' accounts to pay the interest, authorized by the customers when they take out the loans. The problem is that the banks often continue to withdraw money to pay the loans even after accountholders ask them…

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