re: Just took on a client who took out pay day loans

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Just took on a client who took out pay day loans

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what do you do?

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I think western sky gets around the caps because its based on an Indian reservation 

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IIRC it's the Cheyenne River Sioux reservation and they just license their name to some finance company for a fee. Hard to blame them since it's one of the poorest places in the US.

Oh no doubt. I'm just saying this had to be a guy that agreed to terms he couldn't handle and then got so past due that he had to set up for autodraft payments twice a month. It doesn't take alot to see that he was probably past due for the entire balance and/or had court costs and attorneys fees added on.

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I'm not sure how that shite is legal. The admin fee tactic is downright dirty.

For instance, money mutual works like this. Say you sign up for a pay day loan of $500. What it will do is start taking out $75/2 weeks automatically for 3 months. On month 4, it then charges you for the full amount of the loan plus interest.

The scam is that the customer assumes the $75/paycheck is at least paying the interest, or a portion of the principal, but it's not. They are just re-charging you admin fees to continue the loan. So by the time you realize what is going on, you've paid them $450 in admin fees for a $500 loan and you still owe them for the full amount of the loan plus interest.

How is it legal? Who knows. All I know is to stay away from anything Montell is selling

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They (the lenders) also get away with those rates, because the companies lobby state governments and get the legislation passed that allows for those rates to be charged within that state.

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You mean like every other industry in existence does?

Payday loans and similar places should have a legal cap on the interest and fees they charge because

1) this is predatory lending, it's immoral

2) not to protect people from themselves, so to speak, but to protect society as a whole. No one is better off getting one of these loans in the long run, except for the predatory lender. I would imagine our society would be better financially as a whole if these didn't exist, from a practical view.

Of course, illegal loan sharks will always be around, but we don't have to legalize and thus endorse their practices

Threads like this honestly bother me. A bunch of people who don't use payday loans are talking about how much they hate them.

Nobody is even bothering to go out and ask actual people that use them how they like them.

To me, this thread reeks of people seeking to control the lives and economic activity of others.

For those who are calling for rate caps...you do understand price controls have never worked in any industry they have been applied to, right?

Sometimes paternalistic liberals aren’t far off in that some folks need to be protected from their own ignorance and stupidity

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People in this thread hate freedom

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I wouldn't go that far, but using APR to characterize payday loans is just totally absurd.

Using this kind of reasoning — or lack of reasoning — you could quote the price of salmon as $15,000 a ton or say a hotel room rents for $36,000 a year, when no consumer buys a ton of salmon and few people stay in a hotel room all year. It is clever propaganda.