Utah BBB issues EZ Loan Protection alert

Over the past six months, more than one hundred consumers from 31 states have filed complaints with the Utah BBB about Washington, UT-based EZ Loan Protection after it snatched cash at $30 a pop from bank accounts -- a total of at least $3,000.

by Broderick Perkins
© 2011 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Utah's Better Business Bureau recently issued a nationwide alert warning consumers about an operation selling "payday loan protection" and surreptitiously snatching cash from dozens of consumers' bank accounts.

Over the past six months, more than one hundred consumers from 31 states have filed complaints with the BBB about Washington, UT-based EZ Loan Protection after it grabbed cash at $30 a pop from bank accounts -- a total of at least $3,000.

Utah BBB reports the complainants generally allege they have no knowledge of EZ Loan Protection and don't remember signing up for any sort of loan protection, but have been dinged for $30 and are demanding their money back.

Several consumers said they've never taken out a payday loan.

Payday loans are supposed to be quick and easy, short term loans to see you through a brief hard time lasting a week or two.

To the contrary, the Center For Responsible Lending's (CRL) latest treatise on the payday loan industry "Payday Loans, Inc. Short on Credit, Long on Debt," found that the predatory loans have trapped 12 million Americans in a payday loan borrowing cycle that can last for up to two years and cost as much as 400 percent in interest.

It's not surprising an outside operation would try to cash in on vulnerable consumers struggling to escape payday loans. Just as mortgage fraud has piled on since the housing crash, come-ons related to other financial services is a common under current in a weak economy.

Utah BBB says EZ Loan Protection has responded to some complaints, while some remain unanswered and many are unresolved.

The company responds by claiming "Our records indicate that (customer) entered into our program and was charged $30.00 on (date) in compliance with our terms and conditions," according to the BBC.

Some complainants told the BBB they are not sure how the company got their bank account information.

Others say a representative from the company called and offered the product, they declined, but were jacked for the cash anyway.

Other consumers say they were lured by an online popup ad, closed the ad, but were nevertheless charged.

Still others, who seldom conduct business on the internet are "baffled" by how the company got their information.

"This company is obviously not telling customers in a clear and conspicuous manner that they will be charging them for loan protection services," said Jane Driggs, BBB president.

EZLoanProtection.com. One and the same?

It's not known if the two are connected, but a privately listed Internet domain EZLoanProtection.com, due to expire in November, a year after it was initially registered, also appears to offer loan protection services, claming "MORE THAN 17 YEARS OF SUCCESSFUL FINANCIAL SOLUTIONS."

Items quoted below appear just as they appear on the web site.

The site design itself contains a host of dead elements and other red flags that should make any relatively savvy web-browsing consumer suspicious, including a dateline/clock frozen at "Friday, July 18, 2010"; social network buttons and menu items ("Support," "FAQs," "Help," etc.) that go nowhere; and what appears to be several blog entries from November and October (It's June) that don't link to anything.

EZLoanProtection.com's home page offers "SKIP PAYMENT," "LOSS OF JOB" and "EASY CASH NETWORK" services, the latter of which promises to "put interest-free money back in your pocket through its vast network of lending, insurance, debt consolidation, and tax savings institutions," but on it's "Solutions" page, it lists only two generic names from it's "vast network":

"Here are few companies we work with
Extra Cash
Network Loan Solutions"

The "company names" are not hot linked.

Also, on the home page, the site says, "Skip Payment and Disability coverage -- up to $500 per loan amount. For literally pennies over the life of your loan you can be protected. And for your convenience, we'll add the amount to the loan's principal outstanding balance."

"Payday Loan Security" (rather than "Protection") is mentioned on the site, but only in the browser header for the "Terms and Conditions" page.

Those Terms and Conditions are either very poorly conceived and written or purposely vague and confusing.

On the Terms and Conditions page, a "Payment Assistance" service (also found on the "Solutions" menu page) says, "In the event you are unable to meet your scheduled payment obligation with your loan provider(s) due to loss of income or financial hardship, please fill out the form on this site LEAST 5 DAYS PRIOR to your payment due date. You are eligible for assistance with up to THREE CONSECUTIVE PAYMENTS or a maximum benefit amount of up to $79. YOU will need to make arrangements directly with your loan provider(s) should you choose to defer your loan, or pay penalties due to delaying your payment, as we will mail the Payment Protection Plan benefit payment directly to you within 7-10 business days of receiving your request and your premium payment of $30"

Huh?

EZLoanProtection.com's confusing Terms and Conditions also do not fully disclose interest rates, APRs, total "protection" costs or real, detailed loan terms.

It offers an online "Loan Request" form asking for name, address, email, phone number, "Payment Location, Payment Due Date, Amout due, Original loan amount, and Payments to date.

Silence isn't so golden

The online company didn't respond to an email request for an interview and several calls to a number listed on the Web site were dropped before getting through.

When someone finally answered, he said, "We are not EZ Loan Protection. We help with one of their services. We are a customer care company that works with dozens of Internet companies," and then suggested I talk to his supervisor and forwarded me to a "Mike," -- voicemail.

We left a message, asking for their side of the story, explained we were on deadline and left "Mike" a contact number.

He had not returned the call at deadline.

If it walks like a duck, quacks like a duck, it's a good chance there's a bill of goods involved.

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© 2010 DeadlineNews.Com

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Reexamine Your Risk For Flood

Are you aware that everyone lives in a flood zone? Do you know floods are the most common U.S. natural disaster? Do you understand that your home is more likely to suffer flood damage than fire damage?

by Broderick Perkins
© 2008 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Flood insurance is only mandated for properties in high-risk flood zones, but even if you live in a low- or moderate-risk area, you should bone up on the National Flood Insurance Program (NFIP).

To help get you started, here's a quick primer on floods and flood insurance.

• Floods are the most common natural disaster in the U.S. If you live in a flood plain, your home has a 26 percent chance (more than one in four) of being damaged by a flood during the course of a 30-year mortgage, compared to a 9 percent chance (less than one in ten) for fire damage.

• Your regular homeowner insurance policy typically does not provide benefits for losses caused by a flood, yet the NFIP says one in four flood insurance claims come from areas with low-to-moderate flood risk.

• That's because while everyone does not live in a flood plain, everyone does lives in a flood zone, says the NFIP.

If you live in a low- to moderate-risk area made so by a system of levees, dams and dikes -- as Midwestern and Gulf of Mexico area residents have learned -- the risk may be reduced but it is not removed. Levees, dams and dikes are not impervious to nature's worst.

Flooding can be caused by heavy rains, melting snow, inadequate drainage systems, failed flood control structures and tropical storms and hurricanes.

Even if you have a hillside home and you think you are out of harm's way, there's a risk of mudslide or debris flow which is covered by flood insurance.

• The share of claims from low- to moderate-risk homes and the overall risk for flooding could increase. A recent U.S. Climate Change Science Program report "Weather and Climate Extremes in a Changing Climate" said flatly, global warming-spawned climate change is increasing the intensity, duration, frequency, and geographic extent of weather events.

For example, 15 years ago, after the Midwest was previously inundated by what was pronounced a "100-year" or a "500-year" flood, some residents believed they'd seen the worse and dropped coverage.

This summer, uninsured homeowners got soaked.

• The term "100-year" flood doesn't mean there's a major flood every 100 years. It means a 100-year flood would have a 1 percent chance of occurring again in any given year and a 500-year flood a 0.2 percent chance.

• In non high-risk areas you could qualify for the Preferred Risk Policy that provides contents coverage beginning at $39 per year and building plus contents coverage beginning at $119 a year, according to the NFIP.

• If the relatively small premium doesn't get you to at least learn more about flood insurance, keep in mind, if you don't move fast you could lose. Once you decide to buy flood insurance, there's a standard 30-day waiting period, from the date of purchase, before a new flood policy goes into effect.

There is no waiting period provided:

The initial purchase of flood insurance is in connection with the making, increasing, extension, or renewal of a loan in a high-risk zone by a regulated lender.

The initial purchase of flood insurance occurs within one year of a flood zone map change.

• You could have to wait even longer for related coverage. Insurers in the Midwest currently have moratoriums on sewer and drainage coverage, which is part of your homeowner's policy, but can protect you from flood induced sewer and drainage problems. Moratoriums on selling disaster-related insurance coverage are common following a disaster.

• If you aren't required to have flood insurance and choose not to buy it, it's a good idea to have as much as $20,000 socked away for self-insurance. For just one inch of water in your home, expect an estimated $8,000 in damages, according to the NFIP's "Cost of Flooding" estimator. A foot of water -12 inches -- will cost you nearly $19,000.

• Residential NFIP coverage provides up to $250,000 of insurance to protect your owner-occupied home and up to $100,000 to protect your belongings. In a high-risk area, federally insured or regulated lenders will require you to have flood insurance for the amount remaining on your mortgage, or $250,000, whichever is lower. Renters can get up to $100,000 coverage for the contents of their home.

For more information, visit the consumer-friendly NFIP web site at FloodSmart.gov.

Also see the Federal Emergency Management Agency's (FEMA) flood information Web site and FEMA's NFIP Web site.

• And don't forget storm and flood related news that really hits home in DeadlineNews.Com's "Storm Warning" section.

Forewarned is forearmed.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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