Former Manager tells how Payday Loan Shops Trap the Poor into 400% interest

[Matsubara]

http://www.responsiblelending.org/issues/payday/inside-the-payday-industry.html

Rebecca Flippo was the manager of a payday lending store owned by a chain in Virginia. When she heard about a debate on payday lending in the Virginia House of Delegates, after she had quit and found another job, she called her state representative and said, "it's worse than you think." After Rebecca appeared on a television newscast describing her insider's view of payday lending, we asked her to tell us her story in detail.

In this 4 minute video, Rebecca tells how payday loans are rarely two-week loans. Most of her customers came in payday after payday to renew the loan—after the first time, they couldn't afford to pay it off. Rebecca tells how she and her co-workers explained away the 400% interest rate, and how tough their collection tactics were. And she tells how she came to understand that rather than help her customers, these loans were "keeping them poor."

[NMDemDist2]

1. you know, I try to stay informed, but when did usury get OK'd again?

was it that damned bankruptcy bill? Those little places are ubiquitous now too.

[mopinko]

11. st ronnie did it. nt

[MissB]

12. Yep.

[jmowreader]

2. Here's what I don't get

These people are nothing more than loan sharks with storefronts. Why isn't the Mafia in this already?

Actually, I know why they aren't: Mobsters are more ethical than payday lenders. They don't charge 400 percent interest.

[silverojo]

3. K&R

Predatory lenders screwing over the poor, and our politicians help them to do it. :mad:

[My Good Babushka]

4. Usury Laws?

I don't know what usury laws are for. I couldn't charge someone 400% interest on money I lend. Payday Loans are the worst, and credit cards aren't any better.

[newyawker99]

6. Hi House of Kewpie!!

Welcome to DU!! :toast:

[MadHound]

7. OK, I've gotta ask

You wouldn't happen to be a Hickman High School grad would you? It's your name that has me wondering, since the mascot for HHS is the Kewpies.

[My Good Babushka]

10. no, sorry

House of Kewpie is my store on Cafepress.

[NaturalHigh]

5. "Do Not Steal From The Poor."

I remember that from the Bible. Payday loans are just a way to rip off the poor.

[Az]

18. Well if you are gonna quote the bible you are gonna put the entire banking industry outa biz

The bible has some interesting restrictions on loaning money and charging interest.

[NaturalHigh]

19. While I agree with you...

there is a big difference between a 7% home loan and a 350 - 400% ripoff.

[The Backlash Cometh]

8. Little Economic hitmen = American entrepreneurs = loan sharks with

a plan.

[earth mom]

9. Some banks and credit unions are now offering their own payday loans

to combat this abuse. Of course the loan costs are still high-just not as high.

[EnviroBat]

13. I'm no math wiz, but how the hell can 400% interest even be possible.

If they capitalized the 400% interest on $100.00, wouldn't that be $40,100 dollars to pay back? I've used these places in times of desperation in the past, and never will again. But the rate was always $15.00/100 borrowed, and the "loan" had to paid in full no later than 21 days from the date it was taken. I was actually late paying it back once and their collectors did threaten me with violence. I believe the quote was "How about I come by your place and kick the shit out of you?" I paid them back, but the penalty was only $25.00. I do have to wonder though, if they engage in some pretty shady collection tactics. I will NEVER go to one of those places again. I recommend NO ONE ever go to those places, but unfortunately they prey upon the desperate. The state licenses them and dictates their rates, but they are CROOKS!

[Zywiec]

14. How would a 400% interest work? n/t

[Gelliebeans]

15. I have noticed

in the last few years the advertisement of these loans increase.

The cable channels that show these commercials tend to be on during legal shows like court TV where people sue the shit out of each other or are awarded money. Just an observation on my part including to two following examples.

Reminds me of the weird Oil Company commercials where they try to convince us they are sensitive to the environment. :rofl:

Or big Pharma peddling pills during the newscast just to let us consumers know that Big Pharma cares about poor people not being able to eat AND take their meds. :wtf:

Things are so screwy in the world now that I just keep pinching myself to see if I am real.

[bobbolink]

16. Wanna bet that many of these "companies" are owned by RW Fundies?

How 'bout a campaign to remind them of what the Bible says about usury????

This is one thing you could hit the local and state fundie legislators on--get 'em where they can't argue about it, because the Bible is very clear on this.

Use those fundies so they can't squirm out of it!

And, thanks so much, Matsubara, for highlighting this crap!!!

:applause:

You see how important it is to "liberals"...... :(

[lovuian]

17. They should be put in jail

Awful

[bobbolink]

20. Another kick for those suffering from greedy bastards!

How many lives are being lost because people get in over their heads, just trying to survive, and then can't find a way out???

Why aren't statistics like that followed up?

:kick:

[NaturalHigh]

21. I saw a commercial the other night...

from some sort of "payday loan association" urging people to use payday loans responsibly. Huh? What a load of crap. It's just to give them some cover in case Congress ever decides to grow some balls and look critically into this ripoff industry. Not that we have to worry about our current Congress growing balls anytime soon.