BEWARE LOAN SHARKS - CAC

WHILE HARD times may be forcing some persons to be less cautious in borrowing, officials’ of the Consumer Affairs Commission (CAC) are warning against the practice of using loan sharks or speedy cash loan services.
   Raymond Pryce, research manager at the CAC in Kingston, said the increasing use of same-day ‘loan facilities was now a major cause for concern with an increasing number of complaints coming in to the Commission. Mr. .Pryce said ‘same day’ institutions, often charged interest in the region of 50 per cent. “not on the reducing balance”, a “usurious raië”, which is also accompanied by late payment fees (penalties).
   "I do not know to what extent these places are regulated,” he said, noting that those who complain to the Commission often cannot be assisted as they have signed contracts which cannot be broken, aftering having used either their homes, cars, life insurance and or appliances as collateral. Figures were not available on the number of complaints filed.
   But Sharon Fitzgerald, public relations officer at OBF Financing in Kingston which offers same-day loan services, says that while the company sees its share of persons anxious to access loans without careful consideration of the risks and conditions involved, business counselling was a key part of its package.
    "There are People who would want to (borrow irresponsib1y) but’ we don’t accomodate them. We try to embrace our clients. The intention is not to get their security because we really don’t need it. You could resell to get back the money but often this takes some tline,” she said.     Clients, she says, are offered loans two or three times the value of their security, with an effective 2.5 per cent interest rate, and disbursement in a maximum of three days.
    Attempts to reach proprietors of A.L.I. Financing and Prepay Advance, other companies offering speedy cash loans were unsuccessful.
    A release from the CAC, however, warned persons to be cautious in responding to popular advertisements for same-day loans, pay-day loans and quick loans.
“Although this practice - advancing money to persons with the understanding that repayment will take place by the next pay period or within a specified short period of time — has existed in other countries for sometime, it is fairly new to the Jamaican marketplace and the consumer. The Consumer Affairs Commission (therefore) warns consumers tO approach this type of loan as they would any other financial agreements:
    For example, consider the purpose of the loan, review the terms and conditions of the loan — (including) interest (add-on versus reducing Balance), time for repayment, and non-interest related charges.”