Modern Highway Robbery -- Short term lending in the US

I was about to skip forward through one of those "Cash in your hands. Tomorrow!" ads that cluster densly in late night programming targeting the pour shlumps who can't sleep worried sick over money, when a figure caught my eye: 288%. 288% as in annual percentage interest rate for a loan! I thought I was surely mistaken. This must read 28.8% more in line with the - already outrageous - credit card interest rates.

I paused the program, got my camera and took a picture. Though grainy, there it was: 288%.

I gulped and paused, shook my head and went on with the program. Yet, this bugged me sufficiently to actually go the website of ThinkCash.com, the advertiser in question. The home page shows a slide show of young attractive people raising their arms as to to embrace a new morning, the caption screams: "We provide access to short term loans to cuver life's unexpected events." and goes on to say "Now there's a new way to pay bills, avoid bounced checks, and catch up on life's expenses. Get from $250 up to $2500 with no paperwork and no hassle*. Apply now and join thousands of customers that count on ThinkCash for their cash needs. *No paperwork, no lines, no hassles. * Convenient payment options *A loan is just clicks away"

However, in faint gray type at the bottom of the same page it reads (presented as a graphic on the page, rather then text to apparently thwart copying) "The Annual Percentage Rate (APR) for a loan of $1000.- is 219.4% with 30 bi-weekly payments of $92.53". So by the time poor shlump is done he has forked over $2775.90 for an intitial hand out of $ 1000.-. And the way this is set up, it will more likely then not take the full term to give the money back. All of a sudden Rudy the Rat, friendly neighborhood loan shark does not look bad at all.

Further disclosure on the "Loan Cost & Terms" page explains "The cost of your loan is based on the size of the loan you are approved for. It ranges from $0.92 per day per $100 borrowed (334% APR) for small, short-term loans down to $0.24 per day per $100 borrowed (87% APR) for larger, longer-term loans for customers with successful payment histories or higher credit scores. While these rates are lower than the rates charged by many other short term lenders, they are higher than some other forms of credit, so we encourage you to pay off your loan as quickly as possible."

334% APR! I do not understand how that can be legal. Yet apparently, as - the note states - "...these rates are lower than the rates charged by many other short term lenders..." in other words, it is legal in the US to squeeze borrowers even harder.