Payday lenders constantly look for ways to attract vulnerable and desperate borrowers who are often locked out of traditional lending markets. They are looking for opportunities to sell high-priced payday loans to the working poor.

Payday loan operators are discovering that the brick and mortar (storefront) payday loan operation is incredibly risky. Imagine signing a 5 year lease and hiring staff only to have your state’s legislature outlaw usurious loans. You can be put out of business almost overnight.

In order to protect themselves from state regulation, payday lenders are discovering ways to isolate themselves from this regulation. An industry giant known as Western Sky Financial is based on a Native American reservation. Western Sky claims that it is not subject to state laws and is instead subject to regulation by the sovereign Cheyenne River Sioux Tribe. States such as Colorado disagree.

Other fraudulent schemes operate from Caribbean outposts. Most of these operators mask their identity. Many of them are Americans who attempt to evade regulation by simply hosting a website offshore. Meanwhile the profits are funneled right back into their personal accounts.

The delivery methods of payday loans are what makes these loans possibly the biggest fraud on the radar for 2012. Email spam has always been a lucrative delivery method for sourcing payday loan leads. Some loan commercials have become more popular even on mainstream television channels, including ESPN.

Finally, we are seeing an increase in the use of robotexting, a method in which a computer is used to send out thousands of text messages to cellular telephones in order to lure unsuspecting consumers to payday loan websites. Payday loan robotexting is increasingly being used to promote these predatory loans.

The owners of these websites hide behind offshore website hosting companies that provide shelter and anonymity for the owners. They rarely provide legitimate information on public website directories. Some provide fake information in violation of ICANN policies while others subscribe to private registration through use of a proxy, a method which is legal and fairly common.

Some states such as West Virginia have gone after payday lenders that sell illegal loans to citizens of their states. Others like North Carolina refuse to investigate violators who sell the loans online, choosing only to regulate brick and mortar lenders.

Regardless of which scams are the most popular in 2012, you would do wise to steer clear of any business transaction from less than transparent operators. Checking the Better Business Bureau for a reliability rating can often be your best (though not perfect) defense from scammers and crooks.

Apparently the fee does not apply to ATM withdrawals. A single purchase will  trigger the $5 fee for that month.

Consumers agree that they do not like the fees. However, the fees are not so unsavory that they are planning to leave Bank of America.

Instead, we are seeing another trend. Many customers including this author are making the switch to an alternate account with another institution.

If Bank of America does not waive my fee on a monthly basis, then I will simply stop using it for debit transactions. My credit union does not assess any fees, which makes it a perfect switch.

Another expected trend is one that Bank of America and others are definitely in favor of. They believe that customers will begin using their Bank of America credit cards instead of their debit cards. This benefits the bank, since this opens the door to finance charges that were not possible when customers depended on their debit cards.

For more information about the new fees, Debtors Unite is keeping up with the developments on the $5 monthly debit card fee at Bank of America. They are also following the regulatory unrest over the fees which Senator Durbin is personally monitoring.

Townsends Hotline: 800-319-7254

The Townsends Hotline is staffed by the Accredited Financial Counselors at Vision Credit Education, Inc (Vision Credit). Vision Credit is a nonprofit 501(c)(3) charity organized to provide financial education for public benefit. The initiative is made possible by the North Carolina Rural Economic Development Center and Vision Credit.

Information Sessions

Information sessions will be held in order to provide additional feedback on the Townsends situation. Those who have been directly affected by its closure, either as employees or small businesses whose contract with Townsends was cancelled, are encouraged to attend these sessions. The times, dates and location of information sessions are as follows:

• August 15, 2011 at 6:00 p.m. Townsend Growers sponsoring meeting at Best Foods Cafeteria, 220 E. 11th Street, Siler City, NC 27344
• August 17, 2011 at 6:00 p.m. Randolph County Farm Bureau sponsoring meeting at Bethel Friends Church, 2519 Bethel Friends Road, Asheboro, NC 27205
• August 25, 2011 at 6:30 p.m. Meeting at Carolina Stockyards (Siler City), 260 Stockyard Road, Staley, NC 27355
• August 30, 2011 at 6:30 p.m. Harnett County Cooperative Extension Center is hosting a meeting, 126 Alexander Drive, Lillington, NC 27546
• September 8, 2011 at 6:30 p.m. Meeting at Carolina Stockyards, Farming Alternatives: Forage based enterprises, livestock and horse related enterprises: Elena Eller – NCCES; Landscape and nursery alternatives: Al Cooke – NCCES; Value-added products and marketing online:  Mary Helen Ferguson – NCCES; Vegetable and fruit production alternatives, Area Farmer’s markets: Debbie Roos – NCCES; NC Cooperative Extension family and consumer resources: Phyllis Smith – NCCES; N.C. Housing Finance Agency – Chris Bishop; General legal considerations and tax issues: Ted Feitshans – NCSU, Guido van der Hoven – NCSU

• September 29, 2011 at 6:30 p.m. Meeting at Carolina Stockyards, Situational updates: Kim Decker, Marketing Division – NCDA; Setting up home/business websites:  Brandon King – NCSU; Exit and reorganization options, voluntary liquidation, workouts outside of bankruptcy and various bankruptcy options: Ted Feitshans – NCSU, Guido van der Hoven – NCSU; Aquacultural enterprises: Speaker TBA

• October 4, 2011 at 6:30 p.m. Meeting at Carolina Stockyards, Resources available: Holly Coleman – Chatham County Health Department; Sandy Coletta – Chatham County Division of Social Service; Ashley Brewer – Chatham County Piedmont Health Services; Phyllis Smith –NCCES; Beginning a new business: Gary Kibler – NC Small Business Center, Pittsboro; Locating new employment: Geraldine Brady – Chatham County Employment Security Commission

• October 27, 2011 at 6:30 p.m. Meeting at Carolina Stockyards; Topics and speakers to be announced

We will specifically address the series of events that led to the closure as well as the types of intervention that officials are working on as an attempt to keep the plant and its related businesses afloat. You will have an opportunity to ask questions and receive any recent updates. We will of course keep communications channels open in order to provide up-to-date information as new developments occur.

Financial Counseling

Vision Credit will be on hand to schedule private counseling sessions. Financial counseling sessions are provided specifically to farmers who have lost contracts with Townsends, Inc. due to the plant closures. These sessions are confidential and will be held where it is convenient for you. Financial counseling is also available via the toll-free Townsends hotline at 800-319-7254.

It is recommended that you gather your financial details, including information on your largest assets, outstanding debt and monthly living costs. We will be on hand to help you assess your situation, review the feasibility of individual options for meeting your immediate financial needs and help you transition out of the current crisis.

We are prepared to provide updates to you as new developments occur, so we encourage you to check back frequently for new information. We realize that the Townsends closure was a shock given the recent investment and upgrades that had been made to the Siler City and Mocksville plants. Please understand that government officials and numerous state agencies are working diligently to arrange a solution.

Our goal with this financial counseling initiative is to help you proactively plan for getting through this crisis with your assets and businesses intact. If operations at the company can be restored, then we will help facilitate discussions with your lenders to keep your loans in good standing.

Additional details will be forthcoming.

Locations

Wake County Human Services, Northern Regional Center: This site is reopening for a second year in 2011 and we expect to complete at least 125 personal income tax returns. No appointment is necessary.

Martin Street Community Development Corporation: Hosted at Martin Street Baptist Church, this tax site is new for 2011. The City of Raleigh has provided matching funds for this location which is expected to complete over 100 personal income tax returns for lower income families. We expect to serve a concentration of elderly tax filers and those who are disabled. No appointment is necessary.

We again want to thank Republic Bank for providing the necessary funding to allow us to expand services to those who can often least afford to pay for tax preparation. The ability to help lower income families with relatively simple tax returns allows us to keep more money in Wake County and provide opportunities for our volunteers to donate their time and expertise.

The grant specifically targets two groups who may be underserved in downtown Raleigh. First of all, we are focusing on attracting potential tax filers who are disabled. Many disabled citizens who are very low income have no filing requirement but could benefit from having their taxes filed. These citizens are often turned away from storefront paid preparers whose heavy fees dwarf the refund that would be received. By taking advantage of free tax filing through VITA, those with disabilities are able to receive the tax credits that they are entitled to without having to pay for what is actually a fairly routine tax return.

An additional target population are those citizens who are lower income and are aged 60 and above. While many senior citizens may not feel like seniors, their income may be less than what they used to earn. Those on a fixed income really feel the pinch from tax preparation fees that can easily exceed $100 to $200. Instead, they can take advantage of VITA, which offers free income tax preparation and filing for lower income residents and senior citizens. To further expand outreach to our senior citizens, we have invited our partners at AARP who will be providing the similar TaxAide service on additional weekdays.

Here is the information for the new location:

Hours: Tuesday & Thursday from 5-8 pm.

This is the second consecutive year that IRS has lent its support to our coalition, so it really shows their commitment to helping lower income tax filers afford to be able to comply with the tax laws. In addition to grant funding, local IRS representatives provide training and material support to the volunteer led effort. VITA is a wonderful way to give back to the community, and we couldn’t do it without the generous support of the IRS and the volunteers that give so freely of their time.

The IRS grant will be used to expand outreach and increase the effectiveness of newly expanded site locations. Having a trained site coordinator who is experienced not just in tax preparation but also in volunteer recruitment and management is a real boost. It allows us to extend our programs far beyond what our small staff is able to monitor directly on a daily basis.

Vision Credit Education is an active participant and integral voice of the Wake EITC Coalition. The Wake EITC Coalition provides volunteer tax preparation and filing for lower income families located in Wake County as well as the surrounding Greater Raleigh and Triangle area. It is made up of participating organizations including the local IRS office, Vision Credit Education, Fiscal Progress, Family Resource Center of Raleigh, Wake County Human Services, United Way of the Greater Triangle, AARP, and multiple area churches and community centers.

We thank the IRS for their continued support. For more information on the Wake EITC Coalition, including free tax preparation locations and volunteer opportunities, visit waketax.org.

Before August 15, 2010, financial institutions could automatically cover your expenses when you used your debit card and spent more than your remaining balance. For years consumers have been clamoring to stop this practice, wanting those debit charges to simply be denied. If you attempt to overstep your lending limit with a credit card, they will deny the charge…many consumers wanted the same to happen with debit cards as well.

The problem is not with the protection (which in essence turned the debit card into a credit card in many cases, or else simply withdrew the needed money from a linked savings account) but with the fees associated with it. At about $30 a pop, a day of shopping could turn into a $150 ordeal…on top of the money you were already spending (that you thought you had).

So should you opt-in like your bank or credit union wants? They do make it sound good…like you will be left out if you do not join. We all like to join in. However, they have their own profits to consider, and fees are a big area where they see profit.

The new Federal Reserve law was designed to protect consumers…and it will, if you do not opt-in.

How should the rule change how you treat your debit card? If you regularly use your debit card, you need to always be aware of your account balance, so you won’t face being denied at the register. This is a good practice regardless, and helps you keep a handle on your spending.

If you are unsure whether you have enough in your account to cover your expenses, either choose wisely to not purchase the item, or put it on a credit card. But if you put it on a credit card make sure you will shortly have the money in order to pay the balance in full. Getting charged interest and fees by the credit card company is no more in your interest than paying fees to your financial institution!

So while the financial institutions spin it to sound like they are offering you protection, what they are really asking you to do is give them permission to charge you fees. The good thing is that to opt out, you simply have to do nothing.

Free tax preparation services are available to the elderly, the disabled and any household with less than $50,000 in annual income. This threshold is determined by the Internal Revenue Service to allow for free tax assistance to those who may lack the means to afford pricey services by paid preparers.

If you would like to benefit from this service, contact Vision Credit Education at 919-338-0882 or toll-free at 800-379-4720. You may make an appointment to meet with a trained VITA volunteer who can prepare your income tax return.

Since this program is also supported by the Internal Revenue Service, you may have your return e-filed. This allows for instant submission to the IRS, clearing the way for a prompt refund. Most federal tax refunds are received within 10 days through the service. There is zero charge for preparation, e-filing or refund services.

To receive any funding from the City of Raleigh during such difficult economic times shows how important this program really is. We are grateful for the opportunity to expand our VITA program to provide much needed services to the city residents that need it most.

Tax season runs from January 17 to April 15, 2011. Volunteers will also be on hand at limited locations prior to January 17 for anyone who needs to file a prior year tax return.

This removes one potential source of confusion that likely led to overdrafts from customers who thought their account balance was as high as what was posted in “Account Activity.” Now all transactions appear on that page.

Prior to May 2010, Bank of America would omit any pending or completed scheduled bill payments for the current day from the “Account Activity” listings. This resulted in an overstated account balance.

As anyone knows, when your actual account balance is lower than what you believe it is, you run a higher risk of over-drafting your account. Such a discrepancy in account balances has likely resulted in millions of dollars in overdraft fees over the years.

This change to Bank of America’s online account management console aids transparency and improves accuracy of account information. A better informed customer is better able to plan future payments and ensure they will have enough money in their account.

While Bank of America has finally embraced full transparency of their online banking, other major financial institutions have not. Since regulatory interference is unlikely, it will be up to the competitive market to put pressure on those banks that still do not provide a true balance to their customer.

Indeed, the entire Bank of America online banking experience is much improved. Users now have direct access to all linked accounts, including checking, savings, money market, credit cards and even investment accounts through Banc of America. Having access to all accounts facilitates payments and moving money around. It still takes a day to transfer funds from checking to investment banking, but I imagine this barrier will soon fall as well.

Allegro is one of many large debt settlement companies that skirt consumer protection laws. According to Alabama Attorney General Troy King, Allegro violated the Deceptive Trade Practices Act and the Sale of Checks Act.

Owner Keith Anderson Nelms plead guilty to violating multiple rules of professional misconduct. His Alabama law license was subsequently suspended.

Allegro failed to obtain a license from the Alabama Securities Commission, yet offered debt settlement services to Alabama residents. Approximately 175 of 15,000 total clients were Alabama residents.

Allegro made false, deceptive and misleading claims to customers in regards to its services. One such claim was that since Allegro was run by an attorney, that they would be able to achieve superior results over what other debt settlement companies could provide. The court came to a different conclusion:

Defendant’s debt settlement program failed to reduce consumers’ debt in most cases, negatively affected consumers’ credit ratings, and subjected customers to increased lawsuits and collection activities by creditors. It was deceptively unclear to Allegro consumers that Allegro Law would collect its fees in full before any funds were used to pay creditors.

In fact, the court found that instead of providing legal services as claimed, Allegro instead referred all cases to a third party that did not practice law, yet made claims to the contrary. This was a violation of the Deceptive Trade Practices Act.

These are the summary findings of the court in regards to Allegro:

(1)consumers were led to believe that Allegro Law, LLC was a law firm providing legal services, when in fact, consumers were not provided legal services; (2) consumers believed that Allegro was located in New York, when it was located in Prattville, Alabama; (3) consumers were not aware that they would be charged a fee of 16 percent of their total debt enrolled in the program and that 100 percent of their monthly bank drafts would go toward payment of that fee until the fee was paid in full; (4) consumers were deceived about the effectiveness of Allegro’s program and the certification of Allegro’s services; and (5) consumers were directed to stop making payments to creditors, which resulted in increased interest rates, late fees, further damage to their credit ratings, and additional and increased collection activities by their creditors.

Allegro clients are unlikely to see most of their money. It is unlikely that the court appointed receiver will receive substantially more than the $12 million seized so far. Splitting that $12 million between 15,000 unhappy customers would result in an average refund of $800. Once you count the legal bills of the receiver, the average could be far less.

For information about filing a claim for a refund, view the contact information for the court appointed receiver. Make sure you share your story so that you can warn others away from a similar fate.