AUGUSTA COUNTY, Va. -- Payday lenders found a loophole that allows them to offer an unregulated product. This allows them to offer "open ended lines of credit."
Consumer advocates say it's like having a credit card with a 300 percent interest rate. Dana Wiggins of the Virginia Poverty Law Center described what makes these products so dangerous.
Wiggins said, "The majority of the time when somebody has a line of credit loan, they think it's a regular payday loan. They're like well I have this payday loan. So a lot of times the consumers don't really see a huge difference between a regular payday loan and these lines of credit loans. But in the contract itself, they don't have any of the protections that a payday borrower would normally have. So they do end up being a lot more vulnerable."
Wiggins also encouraged people to explore all options before taking on high interest debt.
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