Washington State’s Department of Financial Institutions has issued a warning to consumers over Malta-licensed payday loan portal operator Northway Financial.

The DFI said the company, operator of Zip19.com, was not licensed to do business in Washington State by either the Department of Revenue or the Washington Secretary of State. It warned consumers “to verify the licence of any lending professional” they were in contact with.

While the department has taken formal enforcement action against the company, it said it was unable to pursue additional action because it was located outside the US.

Northway Financial and a sister company, Northway Broker Ltd, operate from the Plaza Commercial Centre in Sliema and are licensed by the Malta Financial Services Authority. Northway Financial does business as a cash transfer centre in North America and Europe.

Zip19.com offers 14-day loans of up to $1,500 charging $19.98 per $100. Applicants are requested to give personal, employment and banking information. The service is not available in some states and Zip19’s disclosure says states the site serviced may change from time to time without notice.

Similarly to other short-term lenders, Zip19 warns potential applicants payday loans may be unsuitable to their particular needs.

The press in Tacoma (a city with a population of about 200,000, located 25 miles from Seattle) has also featured the Washington State DFI warning.

The consumer alert warned that victims of loans scams should consider themselves victims of identity theft and to take appropriate precautions as scammers had access to bank account information.

Complaints against Zip19 received by Debt Consolidation, the online care forum, include allegations that the lender charges “much more repayment amount than the actual loan amount”. One user however praised Zip19 saying it charged up to 10 per cent less interest than other payday loan operators.

Contacted yesterday, a spokesman for Northway Financial said the company was unwilling to comment before the article went to print.

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