State looks to ban unsolicited check mailings

Image by Flickr user Cayusa Image by 20090215-money.jpg If you weren't expecting the check, always be suspicious.

You've probably gotten a check in the mail that you weren't expecting that looks like free money. Only, when you looked at the fine print you realized it was actually a high-interest loan or commitment to use a service.

Critics say the process tricks recipients into cashing checks without realizing it's a loan.

Well, the South Carolina's legislature is looking to regulate or outright ban that practice.

A bill would mandate that those mailing out checks place a host of notifications on them, such as: "This is a loan solicitation. If you cash, deposit, or otherwise negotiate this check, you are agreeing to borrow the sum of $_____ at the ___% rate of interest for a period of ______ months."

And if the loan has an interest rate of more than 25%, a warning would be required that read "Loans may be available at lower interest rates from other sources."

Makes sense to me.

Check out The Associated Press's reporting on it.