THE most OUTRAGEOUS high-interest SCAM? Westernsky Financial
Well, you know it had to happen. The government passes financial regulation and the vultures move in to fill the void. I saw an ad with a Native American offering loans from Westernsky Financial, saying: "It isn't cheap, but it's a lot less than payday loans" (if I recall correctly). I saw fine print and it said 139%, 36 payments of almost $300. Wow. So I paused the TV and backed up to the fine print. Yup, that's what it said. So I went to their site. Code: Loan Borrower Loan APR Number of Payment Well, that's not formatted nicely, but let's do the math.Product Proceeds Fee Payments Amount $2,600 $2,525 $75 139.34% 36 $298.94 $1,500 $1,000 $500 194.70% 24 $166.95 You get $2,525 after their "loan fee" and you pay back $10,761.84 over 3 years. Or, you get $1,000 after their loan fee of $500 and (are you sitting?) pay back $4,006.80 over just 2 years. APR? 194%. You also agree to be bound by Quote: "the exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe, Cheyenne River Indian Reservation. All borrowers must consent to be bound to the jurisdiction of the Cheyenne River Sioux Tribal Court, and further agree that no other state or federal law or regulation shall apply to this Loan Agreement, its enforcement or interpretation." so you get NO STATE OR FEDERAL CONSUMER PROTECTIONS WHATSOEVER. Just imagine what their collection procedures must be like.I understand that people can be desperate for cash, and for those that have NO other alternative, this can fill that role. But I'd guess that most have SOME other alternative, (maybe selling the TV on which they see the commercial?). Western Sky Financial... I guess technically it is not a scam, but wow. Westernsky Financial. Remember the name. |
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 HOLY SCHNIKEYS! |
| Sounds like they are trying to scalp someone. |
need i say, this is why i luv animals more every day.  |
| I'm sitting here reading this out loud at the dinner table, laughing my butt off. I have been this desperate, but Dang!! Vic says he envisions flaming arrows in the front door. Not good.... Shellie |
| Well, if you need money to keep your house out of foreclosure, or you need money to get someone out of jail, or you need money to keep your car from being repossessed, this may be the only way. They do say there are no pre-payment penalties and I'd hope that people taking the larger/longer loans would make it their number 1 priority to pay these loans off as quickly as possible. Anything they can do to pay any bit of it down. But this gets them into a cycle of poverty. For years they will be paying interest and unable to get out of debt to start putting a few dollars together so that they can buy necessities without borrowing for them. |
| Prey upon the desperate...........disgusting. Who is behind this? Is it private or the rez itself? |
| Most likely done by a third party lender like the payday/title loan co.which is only way to get around U.S. banking laws.and they are using the reservation to avoid U.S. bankruptcy laws. |
| The interest rate is 135%; the $500 fee for the "$1,500" loan jacks the APR up. They say there is no prepayment penalty, but in the case of the smaller load, the APR would go through the roof if you pay it off early. All of the following is off the top of my head. I don't have a financial calculator handy. For example, the minute you get the $1,000, you still owe $1,500. If you paid it off in a week, you'll have paid about $540 in fees/interest. I think that's about 2,700% APR. OK, that's unfair. Who needs to borrow for just a week, right? Even though that's what they are comparing themselves to. So how about 6 months? About $900 in interest and $500 in fees for a total of $1,400. You'll pay back about $2,400 in total for that $1,000. About 280% APR. Give or take. I don't know about this particular company's makeup, but I wonder if an outside "investor" has come in to "help" them set up this business, just like they do with the casinos. If I disappear, you'll all know why. They've added some rates and some "loan programs" as of March 29, 2012: |
| how sad! |
| I have seen the fine print & knew how much would be paid. That whole not bound by federal laws thing - that means if you file bankruptcy it doesn't matter? They can still come after you? I got stuck with some bad debt and had some credit issues since my divorce. I was going to "borrow" the money to PAY for bankruptcy (shadey I know, but I don't have the money to pay some one to help me...viscious circle). |
| What is the actual interest under the payday loan companies, seems they hide that pretty well too. Fortunately I've not had to use one so I don't know but life happens and people are desperate. You don't just go into a bank and get a personal loan easily either, banks are not as bad but they're still not the good guys. |
 wow. I am glad I found this site. I'd heard on the radio commercials and have seen the TV commercials, and while I feel this desperate- I will.say I am not this dumb. Lol id like to think Ive learned something on my debt spiral. i am trying my best to get out of debt, but with a lay off going from making 28$ p/h to 8$ p/h, its so not easy. Its damn nearmpossible, going backwards. However, I refuse to.subject myself to an impossible situation like the one western sky is offering. Id rather offer up my pinkey finger than 100's of % intrest rates...nuts!! Thanks again, for all your great comments. |
| Scary stuff! The worst is that they are taking advantage of people who need help the most. I thought my 2% interest rate on my car loan was nasty. I take it back!!! |
| I am very happy you found this to be helpful. I would do just about anything legal to avoid getting involved in this "opportunity." Each different state has different rules on payday loans and pawnbrokers. If you live near the border of another state, perhaps you could call a pawnbroker or payday loan operator in that state and understand what their terms are. I am very very sorry you are in a tough situation and if there's anything you'd like me/us to read and try to help interpret, please ask. You can stay anonymous or you could also register and send a private message to me if you'd like. |
Ron wrote: They do say there are no pre-payment penalties and I'd hope that people taking the larger/longer loans would make it their number 1 priority to pay these loans off as quickly as possible. Anything they can do to pay any bit of it down. "No pre-payment penalties" does not necessarily reduce the total amount you have to pay. If it is a "simple add-on interest" loan, the borrower owes the total amount - principal PLUS interest - no matter when they pay it off. (Yes, we found this out the hard way when we were still young and naive.) Native American tribal lands are sovereign nations, and are considered "domestic dependent nations" within the borders of the United States. You are, for all intents and purposes, getting a loan from a foreign country. Definition from http://financial-dictionary.thefreedictionary.com/add-on+interest "An interest calculation sometimes used to avoid state usury laws (prohibitions against excessive interest) or to gain the equivalent of a prepayment penalty not otherwise allowed by law.The interest for the entire term of the loan is calculated as if no payments will be made until the loan matures.The total interest is added to the principal, and the borrower then makes equal monthly payments over the term of the loan. Even though the borrower reduces the outstanding principal balance with each payment, he or she is still paying interest on the whole amount borrowed." |
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