Crooks are finding seemingly limitless ways these days to take advantage of seniors – especially because electronic Social Security checks are such a tempting target.
Just last week, we held a hearing in the Senate Aging Committee that I chair to analyze the effects of short-term, advance deposit loans on seniors with limited incomes.
Banks typically offer these loans to customers who find themselves strapped for cash and whose paychecks – or in the case of seniors, Social Security benefits – are directly deposited into their bank accounts. The loans are given enticing names such as “Ready Advance” or “Easy Advance,” but there is nothing easy about a loan with high fees that can amount to paying a triple-digit interest rate and terms that could entrap.
A 69-year-old woman testified at the hearing about how she took out a $500 advance deposit loan that, in the end, cost her more than $3,000 in fees. You can watch her testimony and my opening remarks here:
My committee colleague Sen. Elizabeth Warren and I are calling for regulation that would protect seniors from the potential pitfalls associated with advance deposit loans. You can read our recommendations in a letter we sent to banking regulators.
I will keep working to ensure seniors and elderly consumers get the fair and transparent financial services they deserve.
Bill Nelson represents Florida in the U.S. Senate.