European Stars And Stripes (Newspaper) - February 29, 1988, Darmstadt, Hesse                                31s Swallow bait any Mark for loan Sharks Viary nth Isumer editor red1tunions wore initially introduced overseas to Counte acl opt dilation of service members by loan Sharks. _ was the mow successful ii pretty much worked on the  says by Addison. Vice president of overseas operations for rows Federal credit Union with Headquarters in Frankfurt. Loan Sharks still  am very disgusted Wilh some of the things i be seen in the  he adds. In German the whole reason we in overseas is being circumvented by various finance panics and Banks. There Are insurance agents who Are is Oan and car Sale business. They sell a Serviceman e car. Him the insurance and gel him a loan from Afi Nanco  Edison says that Tho finance companies used some who go from 36 percent to 40 percent interest Are operating minimal risk. Trey Are not just loaning Money they Are no a product for example a used car that i generally priced by about 50  is recently says Addison. A Young Soldier applied Tor a through Andrews to gel him out of financial difficulty Jed by such a Deal. In insurance agent had sold him an old Model Bow at a than average Price. Tho agent also provided financing ugh a loan company. The Soldier was Given an address ire to should Send an allo Lmont of s200 a month plus Cost insurance. The car proved to be a Complete Lemon he told  says Addison. That in Price for parts was age King. And in to had not been a Mechanic Horn wow 0 been no Way to could have kept the car running. 1 asked him to Contact the agent Lor a payoff statement 3 Addison. He was nol Given Tia statement and War. Rcd that despite the tact he had made 10 payments he owed the prop be because the interest or finance rfcs had to be paid  to this Point. Addison says he became very concerned and evened i called the company and demanded the  Addison has Ngure. By checking Tho amount of ments made and How much was borrowed tha fhe Lior was paying 38 percent annual interest. Brno automobile dealerships also Are hollering financing i includes insurance. Most gis arc going to fake such an  says Gordon Imons Nector of european operations for service Federal Dit Union sitting in his head Quarls us fico at Pulaski Barracks in  Germany Simmons plams that ignorance the burning Desivo to buy a shiny new car makes Lomers emotionally vulnerable. They say line i la Only have one monthly payment " hey lose ii great Deal of Money in interest paid on the i acc Vii a a live or six year period. They must renew who France Tho next year but the interest on the first year  to Olla the lot owing example of just How much such a Ile ship package can Cost. A buyer married and Ween 25 and 34 yogis old. Purchases full coverage car France on a car priced at s12,700 for $1,532 a year. Of the in Cine is for five years at 13 percent annually Tho total aunt to be repaid on the car insurance would come to 391,46, with the interest atone adding up to $559.46. Lap Christina Angton. Chief of client services for the a eur he Legal assistance Olica in 1-Teidelberg. Says thai to Auto financing by a Dealership is not illegal. It s commonly done in the United sales. Loo she notes. Person buying the cat does t bother to figure the Ounla of interest being paid on the  private loan companies Are Able to ask High interest rates inca Coraling m states where such rates Are Legal Sho is. However use of the military afro Lent system by loan Nanies to collect instalment payments is nol regal Xiding to a Dod regulation. Allotments can to made Oul i financial institution a Bank or credit Union. The allotment n was not sol up so that private companies could make i of the military finance system but thai is what has been Peng overseas for at least 20 years. The companies gel around the did rules by raving Tho Dick make out an allotment to a savings institution. The Rumary 29, 1988 military has no Legal Way to Slop a loan company from then attaching a line of credit to the account. Army Community services acs financial Counselor Are continually faced with the problems some loan companies cause services Erners. In Germany fhe names of the same companies pop up in financial counselling and Legal assistance ounces wherever there is a Large concentration of american military. As in the Case that Addison handled these loan companies generally do not provide borrowers with monthly balance statements. Tamara Jones a financial Counselor with the acs office in Frankfurt complains Hal letters written to stateside Banks Lor information on behalf of clients go unanswered. Other acs officers report is same problem. The Toons offered by such Cut Throat companies Are appealing to Young soldiers because they Aro so easy to obtain. The credit unions Are olten looked upon As being Tough in granting Loans particularly when it comes to members of Tea military who have just entered Tho service. Addison notes that if a go qualifies Lor a loan with a credit Union a Wal usually gel it within 24  qualifying for one he says basically Means having a personal debt to income ratio thai allows paying off the amount borrowed without becoming financially overburdened. Tie size of the family has a lot to do with the ratio of course to adds. A Young person living in the Barracks and eating in the mess Hall can Gat by with a lot higher income to debt ratio than a person with a family. We take this All into consideration when giving a loan we do a credit report. Ii a person is denied a loan by his credit Union he has Iho right to Appeal that decision says Arrington. Noting that local financial Counselor can help work out a loan plan for debt repayment that the Branch manager of the credit Union will accept. The Basic mistake people Maka in shopping Lor a car according to Simmons is doing things backwards they should shop for the credit first gel it approved and then go Oul and look Lor the Best Deal  service credit Golfors a Credif  cervical a for Aulo Mobil shoppers the Herb finale spells out Tho maximum amount the credit Union has approved for Iho person s Purchase of a new automobile. It s like Cash in the pocket says Simmons. The dealer knows this Guy has Money. It enables the credit Union member to look Lor the Best Deal and gel a  with this certificate in hand that s jus whal people do we have found when to have approved someone Lor a loan of 117,000 or $1 , they Don t go the limit they come Back with a car loan of �12,000 or $13,000." Benjamin fluss vice president of overseas operations for finance Federal in Augsburg Points Oul Hal All credit unions offer financial counselling and in debt loan consolidation cases will work with local organizations like acs and Navy Relief to help Tho individual. Gebhard Volk. Gorman attorney advisor Lor Usa eur he regal assistance of Lecce. Says Legal assistance officers can help in individual cases. Under German Law there is no limit on interest Lor different types of Loans. Usury says Volk is defined As interest Hal is double the average charged for a certain Type of loan. Cases of suspected usury he advises can to Suh milled to local prosecutors by Legal assistance officers. If the prosecutor determines that usury is involved me isl does nol have to be paid on the loan Addison believes those should be some Way to Stop loan Sharks from taking advantage of Young service members to suggests attacking the companies under the Laws of the foreign countries where they operate. He plans to bring up the problem at Tho next Moeling of the defense credit Union Council which will Lake place in Rome in May Fly now pay More later by Linda White travel editor by now pay later. Ii May be convenient bul like All conveniences it costs Money. For example a round trip Lickel Between Frankfurt. Germany and new Orleans that costs s675eould Cost another j1u5 in a Short Lerm loan is used to provide funds Lor the Lickel. That s an annual percentage Rale of almost 36 percent. Members of the  military Community pay up to thai much when they use the services of a loan company called Omar. The him makes it easy to borrow. All ii takes is a phone Call. Tho application can be mailed to the customer and resumed by mail. Just Tell Omni where you want to go. They will Send an itemized Sla Lement including Iho ticket Price and giving the finance charge and annual percentage Rale. Repayment of above ticket loan is spread Over five months in instalments of is 56per month or a. Local of $780, ii is done by the allotment system so Omni requires a copy of the borrowers most recent pay voucher and a completed and signed Atto Lmont form a 1341 no More than two  Are allowed. The Money is tunnelled through a savings  among the papers ins Borrower receives Are iwo cards Ono opening a military savings account in its Case with Amily Bank no address Given and the other authorizing payment to Omni from Hal account the Bank automatically transfers the allotment when in arrives. Technically Hal is not illegal what a person does Wilh his Bank account is up to him it s usually up to the Borrower to find financing for ticket and vacation costs. Both the charter firms serving the us. Military Community in Germany aces and Mac refer customers to financial institutions. Aces offered Fly now pay later some years Back bul in did l work Oul according to Walter Mccarthy head of the company. Customers Are now Rol erred to their credit Murvion or Bank. Mac also docs nol offer Fly now pay later arrangements thai company refers customers who ask Loril to the German Hawaii Agency in Frankfurt the agent Lor Omni. The Rak travel Agency which has contracts to provide travel services on some air Force bases said thai it does not have Fly now. Pay later schemes and does nol Lelei customers to a financial institution we do accept credit  a spokesman said credit cards charge varying Inlet est percentages on unpaid balances. Cd Slomers usually can Gol a bettor Deal from Ihen Riedil Union or Bank. American express is Hilary banking facilities Don t offer Fly now. Pay Laler As such but have travel Loans at 15 percent annual interest rate a minimum of Sijoon Musl to borrowed and the customer Musl bling in a Bill irom the travel agent or airline showing the Cost of the vacation or the ticket the payback on a 11,000 travel loan Over 12 months would be $90,25 a month for a total of $1,083. That Means More miney for a longer time at a lower Cost than the Orrt Deal. Andrews Federal credit Union which has 10 offices in Germany and one in the Netherlands also has vacation Loans at 17 percent annual interest Rale repayment of a  travel loan would to $91.21 per month Lor 12 months or a total of 11,094.52. The Money Musl be repaid in 12 months or less said vice president Henry Addison of Frankfurt. The reason is so thai Iho customer can t tack on another vacation loan the ne1 year for his next vacation. When Soccono starts to Pyramid indebtedness he is headed for trouble Addison said. Some problems have developed with Bor Oweis who can l afford these Loans. Acco Ruig to John Martensen. Chief of Legal assistance division v corps Olica of Thyl stall judge advocate. Consumers should shop around to make sure they Aio nol paying More than they have to he said. Omni was created in 1970 by Fred Nives and appealed in Europe the next year. Nives is based in new Rochelin. N y. Attempts Over several months by the Slars and stapes Washington Bureau to reach njos for comment were unsuccessful the fian Kurt agent for Omni. The German Hawaii Agency is located in a  cellar of an apartment building correspondence lion the firm bore Tho name Stripling Gorman Hawaii revised inst & Berle lungs a Mph a Man who answered the Telephone at the German Hawaii Agency and who would identify himself Only As the Boss refused to answer questions or grand the stars Ami stripes an interview. The stars and stripes Page 15