Our project goal was to propose initiatives for the Danish Consumer Council which would protect consumers from excessive indebtedness. Payday loans are short term, high interest loans which are intended for emergency expenses. These loans can trap consumers in a cycle of debt if not paid off on time. We found that the three major reasons for payday loan indebtedness are: consumers are trapped in a cycle of debt, payday lenders are running a delinquency intensive business, and payday loan advertisements are targeting impulsive consumers. To address these three problems, we proposed a multi-pronged solution consisting of four initiatives: a credit database, advertising limits, 48-hour cool-off, and a charge cap. We also recommend requiring lenders to disclose more loan usage information.

• This report represents the work of one or more WPI undergraduate students submitted to the faculty as evidence of completion of a degree requirement. WPI routinely publishes these reports on its website without editorial or peer review.

Creator

• Holman, Mitchell Dean
• Merrill, Ethan
• Zhang, Junhong
• Dwan, Robert Alan

Subject

• Well-Being
• Industry
• Community

Publisher

• Worcester Polytechnic Institute

Identifier

• E-project-101118-112828

Keyword

• Equality--Social aspects
• Predatory lending

Advisor

• Foo, Katherine
• Ault, Holly Keyes

Year

• 2018

Center

• Copenhagen, Denmark Project Center - IQP

Sponsor

• Danish Consumer Council

Date created

• 2018-10-11

Location

• Copenhagen

Resource type

• Interactive Qualifying Project

Rights statement

• In Copyright