Several companies, some of them operating through the Internet, offer "paycheck advances." Consumers are encouraged to take out a loan against a paycheck they expect to receive in the near future. These short-term loans with high-interest rates, and high penalties for late payments, are often marketed to consumers who do not have traditional bank accounts. These companies could most easily be criticized for which of the following?

Question

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These companies are taking advantage of people who are already disadvantaged by not having traditional bank accounts and offering them loans with high-interest rates and penalties, putting them in a worse financial position. This practice could be considered predatory lending and could be criticized for poorly serving disadvantaged consumers.

Several Companies, Some of Them Operating Through the Internet, Offer