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Sep.03

8:51 PM ET

Wednesday, 3 Sep 2008

Scam Alert: CashCall.com

Posted By:Carlo Dellaverson

Topics:Interest Rates | Consumers | Personal Finance

Have you seen those commercials for Cash Call – you know, the ones with Gary Coleman hawking cash loans (“What’chu talkin’ about, Cash Call!”) under the guise that you can get an immediate infusion of money with a seemingly easy application process?

As you might expect, Cash Call is not what it says it is.

Here’s how it works: Let’s say you live in California and are looking to borrow $2600. Cash Call’s Web site tells you what its commercial conveniently omits: that you only receive $2525, a full $75 less.

But it gets better (worse, actually). If you were to go ahead and take out a loan, you’d be paying nothing less than a 99.25% interest rate, which translate to 42 payments of $216.55 each. That amounts to $9095.10 you’re giving Cash Call – over $6500 for a $2500 loan. And the company reserves the right to change its rates, so you could actually end up paying even more.

And as outrageous as it sounds, a 99.5% interest rate is legal. Very few states have usury restrictions, so companies like Cash Call are free to charge whatever they please.

Bottom line? Fast cash sounds appealing, but in Cash Call’s case, it doesn’t pay.

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