This Is What Happens When You Apply for a Payday Loan

Pam Fessler got dozens of calls, for months
By Evann Gastaldo,  Newser Staff
Posted Nov 6, 2013 1:01 PM CST

(Newser) – If you've spent much time on the Internet, surely you've seen an ad for a payday loan service, promising a quick cash advance. Pam Fessler decided to click on one of those ads, and what happened next astounded her. She applied for a $500 loan using mostly fake information (including a fake name, address, Social Security number, bank account number, and routing number), but gave her real phone number. Less than a minute later, she learned she'd been pre-approved for a $750 loan (which would cost her $225 in interest after just one week, an APR of higher than 1300%). She turned it down and even explained she was simply researching for an article, but over the next few months, she got dozens of phone calls from other lenders.

"Many of the callers has strong foreign accents. One caller, who said his name was Kevin, told me that Mary [the name she used] had been approved for a loan of up to $5,000—10 times what I initially asked for," Fessler writes on NPR. Even more confounding: Kevin worked for a company that was completely separate from eTaxLoan, the company Fessler applied with. Turns out eTaxLoan and other companies like it just locate potential customers, then sell their information to lenders. Not surprisingly, Fessler couldn't get in touch with anyone from eTaxLoan, but she did talk to the head of a similar company. He insists his company is completely above board, but confirms that other companies do resell personal data. Click for Fessler's full column. (Read more loans stories.)

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