preying on the desperate

[solarbird]

You see these all the time - payday loan companies, and all that - and this is just one example. ThinkCash (http://thinkcash.tv) is a vulture lender advertising "quick cash!" lending on television through direct deposit into your chequing account. Unlike most of their customers, I looked at the numbers in the fine-print. The interest rate is 217%. (Not 21.7%; 217%.) Clearly, it is compound often - probably continually - as a US$1,000 loan results in you paying back US$2,775.9.

If you know anyone, anyone, who is in the sort of position to consider these things, stop them.

Comments

[wrog]

so...
didn't we used to have laws against usury?
what happened to that?

[solarbird]

A ruling in the ... mid 1990s? ruled that interstate corporations were bound by the state laws of their state of incorporation and that interstate commerce (such as money transfers) were bound (of course) only by the Federal government, so local branch/state laws couldn't regulate things like loan terms. This created a quick race to the bottom and effectively ended usury law.

[smarier.livejournal.com]

I've said for years these places should be outlawed. I know to many people who have used these in the past to get from one pay check to another. They fall in to the trap of having to borrow more to just make the payment. Usually the only way out is bankruptcy.

[emrecom.livejournal.com]

So The Mob would be legal now if sharks crossed state lines?

[solarbird]

...which has of course since been made much more difficult. Alas.

[smarier.livejournal.com]

But some corporation and its stock holder are (were) making lots of money.

[darthhellokitty.livejournal.com]

It always amazes me that these things are legal.

[nojay.livejournal.com]

Someone else posted details of a British payday loan that ran about 480% annual interest, as I recall. This number was a bit misleading as it was a very short-term loan, 30 days for full repayment, and high-interest as it was aimed at a high-risk market where getting the original investment back, let alone the full repayment was problematic and might involve legal efforts (or legbreakers) on the part of the loan company.

[dustin-00.livejournal.com]

I know somebody that would consider this.

There's not stopping him. He and his wife both have zero will power when it comes to spending. They can't communicate about it -- who ever spends the paycheck first gets to keep it!

I kind of avoid him now.