Business

State DFI warns of out-of-state loans

If you're looking for a small loan, be careful.

The Washington State Department of Financial Institutions urged in a news release Friday that consumers should be vigilant when seeking short-term and/or small loans from companies seen on TV or online.

That means read the small print and make sure any company you’re doing business with is licensed in Washington.

The protections offered by state law might not be available to consumers using these services from out-of-state.

“Most Internet-based payday loan lenders are, in fact, not licensed to do business in Washington,” DFI Director of Consumer Services Deborah Bortner said. “When a consumer takes a loan from an unlicensed lender, there is very little we can do to protect them, and often little we can do to the company if they don’t adhere to our laws.”

“Consumers,” she said, “should know one of the biggest complaints we receive about online lenders is the over-deduction of funds from the consumers’ bank accounts.”

The state DFI offers the following tips when making a short-term or small loan:

Verify the license of a payday lender in Washington by calling 877-746-4334 .

Read the fine print in any and all documents or agreement.

Never sign or agree to anything you don’t understand.

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