One of the biggest cases of fraud that I had to fight against with a small pay day loan lender was the obvious fraud of interest rates that were offered versus what was signed against. The problem with a lot of these companies is that they offer weird clauses within the fine print that increases the interest rates of a loan based on occurrences, which is genuine fraud within the lending industry.
A lot of these companies add a higher interest rate clause into the loan when they can provide proof of late repayments, or they can find a reason for the customer to be less affordable. Usually, there must be circumstances for the lender to be able to calculate that the customer is less affordable than they were before the loan had been accepted.
One of the ways that they can make a customer less affordable is by increasing the rates once a company has made a late repayment. If a customer pays a month late, they can increase the rates as much as they want in the clause to claim that they believed due to the missed repayment, the customer is less affordable than they were when they first applied for a loan.
There are other ways that lenders also do this. For example, they will intentionally accept loans using finances they knew were partially laid due to freelance work or works that they know would not be continued multiple times. That way, they can borrow a higher amount for a lesser interest rate without telling the customer that the inconsistent payment was one of the reasons why they were so “affordable”. From there, they can either increase the interest rates or wait for the loan to eventually become too difficult for you to pay off yourself.
Again, we have fought many companies who have used these practices.