Payday lenders find fertile place on Web

Full story: Chicago Tribune

CashNetUSA.com isn't your typical financial-services business. For one, at a time when 140,000 industry jobs have been lost nationally year to date, the Chicago-based online payday lender is hiring.

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bill p

Portland, OR

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#3
Dec 30, 2008
 
Stupid is as stupid does. If you fall for this scam, then you deserve whatever happens to you! Funny, you had enough money to pay your internet bill!
Albigensian

Morristown, NJ

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#4
Dec 30, 2008
 
I know math is hard, but, really, a fee of 15.5% for a two week loan is not the same as 403% annual interest.

Yes, I know, 15.5%*26weeks/year = 403%

But (due to compounding) an APR of 403% is actually equivalent to a fee of 6.41% every 14 days.

Whereas a fee of 15.5% every 14 days is an APR of 4138 %

Not that regulation would make much difference, as there are always people who want money NOW and, at the moment, don't really care how much it will cost them.
PJR

Germany

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#5
Dec 30, 2008
 
bill p wrote:
Stupid is as stupid does. If you fall for this scam, then you deserve whatever happens to you!
It is NOT a scam.

If customers are informed, and if it is voluntary, it is not a scam, and it's no one's business but the parties involved.
Thomas

Oklahoma City, OK

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#6
Dec 30, 2008
 
Let's see they had revenue of $200 million and received $30,000 in state fines. Hmmmmm, at that kind of return it seems like they can keep ignoring any state laws they want.
Lauren

Neenah, WI

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#7
Dec 31, 2008
 
I happen to know quite a few people that work at Cash Net. Let’s just say a majority of the people I know that work there or used to work there, were under qualified for the types of positions they held. The quality in the characteristics some of these managers or leads had is far from what you would like to see in the roles they held. I guess it’s because of “who they knew” for the reasons they were able to get those positions. Their managers, leads, supervisors, etc… lack education, analytical skills, and proper grammar skills! That’s with me being nice! They may make millions of dollars but the quality in their people is atrocious.
more crap

Warsaw, IN

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#8
Dec 31, 2008
 
Albigensian wrote:
I know math is hard, but, really, a fee of 15.5% for a two week loan is not the same as 403% annual interest.
Yes, I know, 15.5%*26weeks/year = 403%
But (due to compounding) an APR of 403% is actually equivalent to a fee of 6.41% every 14 days.
Whereas a fee of 15.5% every 14 days is an APR of 4138 %
Not that regulation would make much difference, as there are always people who want money NOW and, at the moment, don't really care how much it will cost them.
Interest does not compound on these loans. It is not a savings account, it is a loan on which interest is only charged on the principle. 400-500% may seem like a lot but don't forget that they're giving loans to people with basically no credit worthiness. Their charge cards are maxed or canceled, no one else will touch most of their customers with a ten foot pole. There are other online loans which charge 800 to 1200 percent interest. Have you seen all of the PLS stores in Chicago? I believe they charge 720%.
SCR

Naperville, IL

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#9
Dec 31, 2008
 
During two Med cruises with the Navy back in the '70s, I ran what were known as "slush funds." Borrow $5, pay me back $6 at the next pay day, or else the pay-back was compounded. Far from taking advantage of someone down on their luck, I was there to fund another sailor's (or marine's) need for an evening of entertainment when they flat out couldn't wait for the next payday. Seems like I filled an important need. The profits from this paid off very well and I left the Navy with a nice enough nut to ease my way into civilian life. My view on payday loans is that they are to be avoided at all costs. That said, they're not breaking the law, are they? scr
Thomas

Oklahoma City, OK

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#10
Dec 31, 2008
 
SCR wrote:
During two Med cruises with the Navy back in the '70s, I ran what were known as "slush funds." Borrow $5, pay me back $6 at the next pay day, or else the pay-back was compounded. Far from taking advantage of someone down on their luck, I was there to fund another sailor's (or marine's) need for an evening of entertainment when they flat out couldn't wait for the next payday. Seems like I filled an important need. The profits from this paid off very well and I left the Navy with a nice enough nut to ease my way into civilian life. My view on payday loans is that they are to be avoided at all costs. That said, they're not breaking the law, are they? scr
What did you do when someone couldn't pay you the $6 dollars at the next payday. Did you charge them $7 on the next pay day or did you push them off the ship?

just curious.
Brett Favre

Markesan, WI

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#11
Dec 31, 2008
 
Lets see. They've served a million customers. 90 percent of them are satisfied. That means that they have 100,000 unsatisfied customers! How are they still in business, much less hiring?
PJH

Schaumburg, IL

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#12
Dec 31, 2008
 
Scam no only because it is barely legal, scummy industry absolutely yes. Too many people get stuck in the downward spiral of having to renew the loan paycheck after paycheck until the loan becomes unmanageable. These places prey on people's desperation.

As much as car loans tend to keep people in the middle class, places like this tend to keep the poor poor. Some may say they payday loans provide a service, but where's the SERVICE in taking advantage of desperation?
john Q

United States

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#13
Dec 31, 2008
 
The sad thing is the FDIC insures the banks that partner with these bottom feeders. The FDIC could essentially wipe out this industry with a few new rules. The payday loan lobbyists have been successful in stopping that from happening. Isn't it about time??
CityGirl

Chicago, IL

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#14
Dec 31, 2008
 
I have never used this company, but I have done a payday loan. For the first time in 5 years I had to do one recently (ChecknGo online) It got me over my hump, I balanced my funds for the rest of the month and now I am good. Payday loans are about the consumers smart use of them. I didn't borrow 300 b/c I wanted to party. I did it b/c I had an emergency that couldn't wait two weeks. Yeah, some of these companies are more than likely garbage, but to say the industry is really bad I don't think so. People just need to be smart and borrow only what you need and READ THE FINE PRINT!
SCR

Naperville, IL

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#15
Dec 31, 2008
 
Thomas from OKC wrote "What did you do when someone couldn't pay you the $6 dollars at the next payday. Did you charge them $7 on the next pay day or did you push them off the ship?"

If someone missed, the new payout was calculated on the total owed: loan + interest was the new base number. Folks knew that and most made an effort to be paid up at the next payday. I gotta tell you, no one borrowed just five bucks.

As for pushing someone off a ship, that was never a consideration. I was always pretty laid back about the whole thing in spite of having a good chunk of money in circulation.

And unlike many now out-of-business mortage brokers, I never provided $$ to just anyone. I had to know them, I had to trust them (and them me) and they had to be sober when they made the agreement. I recall turning down requests in bars a number of times because I knew people under the influence could make hasty/bad decisions.(You see the fallout from that mixture all too often in the press...)

Happy New Year. scr
Pete

Chicago, IL

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#16
Dec 31, 2008
 
PJH wrote:
Scam no only because it is barely legal, scummy industry absolutely yes. Too many people get stuck in the downward spiral of having to renew the loan paycheck after paycheck until the loan becomes unmanageable. These places prey on people's desperation.
As much as car loans tend to keep people in the middle class, places like this tend to keep the poor poor. Some may say they payday loans provide a service, but where's the SERVICE in taking advantage of desperation?
The service is the loaning of money when nobody else would. The only alternative for these people would have been doing without. Payday loan stores aren't putting a gun to anyone's head and forcing them to take money. And the reason for the high fees is of course to make up for the risk. Would you loan YOUR money to someone with a history of not paying it back?
dean

Madison, IN

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#17
Dec 31, 2008
 
these "companies" are no better than mob loansharks, they just don't dress as well, have less honor, and operate in the open. the banking industry bribed the govt to eliminate our usury laws in order to take advantage of people with no where else to turn. If nothing else the govt should require that the APR for these loans be disclosed in huge type on every page of the documents to make people think long and hard before they signup to be ripped off.
Mike

United States

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#18
Dec 31, 2008
 
Scam artists. It should be illegal to do what these companies do - they prey on the disadvantaged.
joekoz

Quincy, IL

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#19
Jan 1, 2009
 
They are doing this only because our inept politicians are permitting it to happen. They must be in on the deal for a cut of the profits. Follow the money.

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