Arrowhead Advance, an online lending company owned by the Wakpamni Lake Community of the Oglala Sioux Tribe, is facing mounting allegations from customers accusing the lender of operating as a predatory scam. Dozens of consumer complaints and negative reviews have surfaced detailing deceptive marketing practices, extremely high interest rates, unauthorized fees, and poor customer service from the South Dakota-based firm.
The company, which offers installment loans of $100 to $1,000 via its website ArrowheadAdvance.com, has been criticized by former borrowers for luring them in with misleading “pre-approved” loan offer emails and texts. Multiple customers claim they applied for loans after receiving these solicitations, provided personal information, but then had their applications denied without reason after being told they were pre-approved.
“I got an email saying I was pre-approved for $1,000, so I completed the application and verification process,” said David G., a Nebraska resident. “After several days of delays, they finally told me I was denied and refused to explain why. It was clearly just a tactic to get my data.”
Shockingly High Interest Rates
For those who do get approved for an Arrowhead Advance loan, the shockingly high interest rates have sparked outrage. The company’s website discloses an annual percentage rate (APR) range of 200% to 830% on its installment loans.
“I took out a $250 loan as I was short on bills, but by the time I finished paying it off, I had paid over $500 in interest alone,” said Tatiana M., a former Arrowhead customer. “The rates are absolute loan shark levels – it’s criminal.”
Early Payoff Nightmares
Even customers attempting to pay off their loan early to escape the high interest have reported difficulties. Multiple reviews accuse Arrowhead of refusing to accept principal-only payments and forcing borrowers to continue paying interest and fees first before permitting early payoffs.
“I sent them over $600 to pay my loan off completely, but they refused to apply it and kept giving me the runaround,” said Nora Lynn Guy in a Trustpilot review. “The customer service was condescending and gave conflicting information every time I called.”
Unauthorized Fees and Harassment Alleged
Other complaints take aim at alleged unauthorized fees taken from customer accounts and excessive calling and harassment when loan payments are missed. One reviewer claims Arrowhead attempted to withdraw $179 from their bank account without notification after the company denied their loan application.
“They keep calling my work constantly and leaving messages with my coworkers even though I’ve never done business with them,” said Kimon, who received an Arrowhead loan solicitation. “It’s harassment at this point.”
Despite the flood of negative reviews across consumer complaint sites, Arrowhead Advance has not publicly responded to the allegations.
Tribal Lending Complications
Part of the challenge in regulating Arrowhead Advance’s lending practices is that it operates on tribal lands. Federal and state lending laws allow tribes to circumvent certain regulations, including rate caps, when making loans across the country.
Some consumer advocates worry this legal loophole permits predatory lenders like Arrowhead Advance to prey on desperation with limited oversight.
“So-called ‘tribal lenders’ are effectively accountable to no one, which creates an attractive environment for bad actors to set up shop,” said consumer finance expert Ted Michalos. “These kinds of lenders appear to prey on people’s short-term money needs while trapping them in endless debt cycles.”
Arrowhead Advance has not responded to multiple requests for comment on the allegations against its business practices.
What To Do About Pre-Approved Loan Offers
If you receive an unsolicited pre-approved loan offer like the ones Arrowhead Advance has been sending, experts advise to proceed with extreme caution before providing any personal or financial information:
- Check the lender’s interest rates and fees – Rates over 36% APR can quickly lead to unmanageable debt
- Read all disclosures and loan agreement fine print thoroughly
- Ask specifically if the pre-approval is a guarantee of being approved
- Consider alternatives like credit unions, personal loans, or borrowing from family
- Check reviews and file complaints for any suspected scams
Consumer protection agencies recommend thoroughly vetting any online lender before taking out a high-interest loan to avoid potential predatory scams and cycles of debt.
