NASHVILLE, Tenn. -- The Better Business Bureau is warning residents about a perfectly legal but very costly money-lending method.

Video: BBB: Company Uses Predatory Lending Method

Credit Central is literally putting the money in the hands of some residents in the amount of $611.16. The company is sending out checks made out to residents, and all the person has to do is cash it in, but paying it back is where the catch is.

"This is a bad deal all the way around for consumers," said Kathleen Culligan of the BBB.

The catch the BBB is pointing out is that if the annual percentage rate is added up, it's a 72.45 percent rate to pay back the money, Channel 4's Dennis Ferrier reported.

What the company is doing is legal, but the BBB has publicly called it a predatory lending practice aimed at people who are struggling financially.

"For the single mom at home (for whom) the 30th of the month seems a long time away, this is money in the mailbox," Culligan said.

One woman who asked to not be identified has already participated in the loan. She said she was in a tight spot and needed the money.

"I had had an incidental that I needed to take care of immediately. It got me out of a spot," she said.

A representative from a Credit Central office on Gallatin Road said, “They calculate the interest rate from that. We don’t have an interest rate. We’re a fee-based company. I’ve got 230-something customers right now.”

The statement was not a surprise to the BBB.

"That’s the tragedy of it. Desperate people do desperate things," Culligan said.

Though it is not legal to charge more than 24 percent interest, fees and other costs can add up to Credit Central’s 72 percent and more.

More: Middle Tennessee Better Business Bureau

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