General Sheridan was right all along:
QuoteSusan Tompor: 139% interest rate?! Crushing quick-loan rates turn $2,500 debt to nearly $14K
"The Price is Right" is playing on the TV in the living room of her tiny apartment, but Patricia Guy sees nothing right about the price she's paying for a quick-fix loan shortly after seeing a TV ad for online lender Western Sky.
She will owe $11,412.12 over four years in interest alone after receiving $2,525 in credit. The annual percentage rate is 139.13%.
Since she took out a loan in February, she has already paid more than $1,500. Next month, another $294.46 is set to come out of her credit union account, tapping into her monthly Social Security payment and pension.
"All of that is interest, just interest," said Guy, 62, who once worked as a welder at a General Motors factory in Lansing. She needs an oxygen tank now and has faced many medical bills to deal with her health. The TV ad for Western Sky sounded promising because it talked about a way to pay off her two payday loans.
The Michigan Department of Insurance and Financial Services is moving to stop Western Sky from doing business in the state. A hearing is scheduled for Sept. 24.
Bone-crushing interest rates aren't part of the large-print on TV when many lenders advertise ways to get fast cash up to $10,000. The pitches talk about solving your problems, not creating new ones. But money does not fall from the sky.
Western Sky's online rates are shown after clicking "See Our Rate Table" on its Web site. There's a chart that shows that a loan of $5,075 could have payments of $486.58 each and have 84 payments to pay off the loan.
Take out your calculator. Those 84 payments would add up to more than $40,000.
Michigan's regulators say Western Sky is not properly licensed to make loans, is charging more than the statutory ceiling for its loans and charging 14 times the legal limit for fees. The state says the lender is charging annualized interest rates that can hit more than 340% and loan fees as high as 70% of the loan amount.
The looming legal question is whether state consumer-protection predatory-lending laws apply if a business is operated by a tribe or a member of a tribe from an Indian reservation.
Regulators argue that tribal sovereign immunity doesn't apply to loans made to borrowers in individual states.
Regulators in several other states, including New Hampshire, Georgia, Maryland and Minnesota, have taken action against Western Sky, too. Georgia's state attorney general also took action against California-based Cash Call, a short-term lender and mortgage business that has a relationship with Western Sky.
Western Sky Financial defended its business in a statement, saying that it "abides by all applicable Federal Indian Law and Tribe regulations." Western Sky maintains that the terms of the loans are governed by the laws of the Cheyenne River Sioux Tribe and says it operates on the Cheyenne River Indian Reservation in Timber Lake, S.D.
A spokesperson for the company said its terms are clear and presented up-front. Consumers must complete online applications, review the terms of the loan and electronically sign the agreement, Western Sky said. "It is not possible for a borrower to sign his or her agreement without reading and agreeing to all the terms," a statement from the company said.
Western Sky said many of its borrowers return to use the company's services, and the repeat business is a testament to their satisfaction.
For Guy, the only satisfaction she has now is that maybe the potential regulatory crackdown would somehow help her find a way out of this mess.
Guy digs through the paperwork she has neatly tucked away in the original envelopes. One is a brochure from Cash Call that she received early in the process that said, "Welcome to Cash Call." Another is a seven-page statement titled "Western Sky Consumer Loan Agreement."
The agreement includes a chart for a "Truth In Lending Act" disclosure. But Guy said she only received that statement, which spells out the $11,412.12 in finance charges, months after she obtained the loan. The loan started in February; she said she got that paper in late May.
Guy said she signed up for the loan over the phone. She is not on the Internet and was not able to click on the rate information on Western Sky's Web page.
She said she wasn't told the total potential payments over the phone. Initially, she said, the company declined her loan but then called up the next day and said she'd qualify for $2,600 with a $75 origination fee off the top.
The paperwork noted that "even though the term of the loan is for 48 months, we strongly encourage you to pay off the loan as soon as possible."
Guy said she believes the company waited to mail that letter just long enough so she'd be able to spend all the money and not be able to send back any money quickly. She said she paid off two other payday loans and other bills.
"What kind of a gimmick are you guys running?" she asked the person on the line handling the loan while I sat in her Lansing apartment. "You're just trying to make money off a poor person."
Western Sky says the application time for its loans is less than five minutes, and it advertises that it's not a payday lender. Loans range from $850 to $10,000.
The Web site states: "We are an installment lender and our rates are much lower than most payday lenders."
Not always true in Michigan.
In Michigan, for example, the maximum payday transaction amount allowed is $600 and the top fee on that amount is about $76. The maximum term is 31 days. In Michigan, a consumer can have two check advances outstanding at a given time, but no more.
Some consumers also have complained of collection problems.
The Federal Trade Commission initially alleged in 2011 that Western Sky, its parent Payday Financial and owner Martin Webb had attempted to garnish consumers' wages without a court order.
The FTC later amended the complaint, alleging that it was unfair of the operation to sue consumers in tribal court in South Dakota and obligate the consumer to travel long distances to a court that didn't have jurisdiction over their cases.
The case is pending.
For many cash-strapped consumers, it may be tempting to simply pick up the phone or go online and rush to obtain cash as easily as you can.
As regulators attempt to hash out what's legal and what's not, consumers must pay attention to the warnings. It's prudent to call state regulators in advance to learn of any ongoing complaints with an outfit, too.
"I know one thing: Everything that sounds good, ain't good," Guy said. "This is killing me. It's really killing me knowing that I'm paying this money, and it's not going anywhere but their pocket."
They're just meatheads for needing the loans anyway, who cares?
Indians :ultra:
Quote from: sbr on August 13, 2013, 01:29:24 PM
They're just meatheads for needing the loans anyway, who cares?
You don't really care who I originally called meatheads, do you?
Quote from: sbr on August 13, 2013, 01:29:24 PM
They're just meatheads for needing the loans anyway, who cares?
If only they had a 401k.
Quote from: Admiral Yi on August 13, 2013, 01:31:42 PM
Quote from: sbr on August 13, 2013, 01:29:24 PM
They're just meatheads for needing the loans anyway, who cares?
You don't really care who I originally called meatheads, do you?
Nope :P
The beating of the war drum in their commercials annoy me.
The payday loan companies in this country charge almost 6000% APR :bleeding: <_<
How these things are legal I'll never know :bleeding:
Quote from: Sheilbh on August 13, 2013, 03:22:06 PM
The payday loan companies in this country charge almost 6000% APR :bleeding: <_<
:o
In the US it varies from state to state. In Florida the maximum is 390%, and the maximum apr and 10% +$5 is the maximum fee.
There's no legal limit over here. Another thing is that there's not limit on roll-over your loan either. So there's a payday loan at a very high rate of interest. The person fails to pay that back, rather than cause them trouble the loan company offers to roll over that figure into another short-term loan. It looks like a better deal than having to go to court but ends up with someone piling up enormously increasing debt.
The Office for Fair Trading's investigating that some companies seem to have trapping people in permanently rolling credit as their business plan. Which I think goes against their license as lenders.
The CofE's getting involved now. The new Archbishop of Canterbury (a former oil executive) is working on plans to provide church buildings and volunteers at low rates to local credit unions and to direct some CofE money to them.
Quote from: Sheilbh on August 13, 2013, 03:22:06 PM
The payday loan companies in this country charge almost 6000% APR :bleeding: <_<
It is one of the worst institutions around. Talk about blood suckers, and on the lowest classes of society.
If we think there's never any good reason to take out a payday loan the proper thing to do is ban them.
Quote from: Sheilbh on August 13, 2013, 03:44:29 PM
There's no legal limit over here. Another thing is that there's not limit on roll-over your loan either. So there's a payday loan at a very high rate of interest. The person fails to pay that back, rather than cause them trouble the loan company offers to roll over that figure into another short-term loan. It looks like a better deal than having to go to court but ends up with someone piling up enormously increasing debt.
The Office for Fair Trading's investigating that some companies seem to have trapping people in permanently rolling credit as their business plan. Which I think goes against their license as lenders.
The CofE's getting involved now. The new Archbishop of Canterbury (a former oil executive) is working on plans to provide church buildings and volunteers at low rates to local credit unions and to direct some CofE money to them.
Hey, what's wrong with modern-day debt peonage? :mad:
Quote from: Admiral Yi on August 13, 2013, 03:52:09 PM
If we think there's never any good reason to take out a payday loan the proper thing to do is ban them.
What about simply limiting the amount of interest that can legally be charged? :hmm:
Quote from: Malthus on August 13, 2013, 03:53:03 PM
What about simply limiting the amount of interest that can legally be charged? :hmm:
That has the potential, given the inherent credit risk of this type of lending, to cut off some borrowers, depending on where you set the limit.
Keep in mind that you get to crazy numbers like 6,000 % not because they charge 6,000 % but because of amortization of the processing fee. At least based on what I've read.
I heard a story once on NPR's Marketplace about payday loans. According to the piece, in states like Florida where the principle, length of time, and rate is limited the profits for an individual payday loan franchise is quite small and the only way to make money is to have many franchises. The terms of the loans that only people who are bad credit risks would use a payday loan; so default is a significant risk.
Outlawing payday loans would be a boon to organized crime; there are always worse options.
Here company's have to include APR in their advertisements and that's actually the figure used by one of the companies (5853% to be exact). Of course the company argues that that isn't representative or fair because they're only meaning to give short loans.
As I say the other problem is normally the roll-overs. The OFT found some companies rolled debt over up to 12 times (ie. for over a year), but even so about half their revenue comes from rolled over debt. So their example is you borrow £300, for 30 days at a £1 a day. When the loan's due and you can't pay the companies are normally very happy (and some actively encourage you) to roll that debt over for another 30 days and to keep it going. Some companies even offer another loan to help you pay back the interest <_<
Quote from: Savonarola on August 13, 2013, 04:08:41 PMOutlawing payday loans would be a boon to organized crime; there are always worse options.
I agree. But they seem sort of anti-credit to me. The basis of credit is that I give you money on the promise that you can pay me back with interest. These companies have barely any credit checks in place (that's a big selling point). I think it's a problem if a creditor is offering money without necessarily expecting their debtors will be able to pay them back.
Also as the Telegraph pointed out the payday loan companies often lend money to the insolvent and they normally get paid because they're most aggressive and short-term. But lending at an extremely high interest rate to an insolvent person seems more like you're cheating their creditors.
I think that's why I like the CofE's attempt. I don't think banning them would help, I'm not sure regulation would but I think trying to set up and fund alternatives is a good option especially for someone like the CofE. I'd like the unions to join in too.
Quote from: Admiral Yi on August 13, 2013, 03:59:57 PM
Quote from: Malthus on August 13, 2013, 03:53:03 PM
What about simply limiting the amount of interest that can legally be charged? :hmm:
That has the potential, given the inherent credit risk of this type of lending, to cut off some borrowers, depending on where you set the limit.
Keep in mind that you get to crazy numbers like 6,000 % not because they charge 6,000 % but because of amortization of the processing fee. At least based on what I've read.
Sure, regulation will limit the profits of this sort of business, which would probably require some limits on lending and so cut off some borrowers. The issue is whether such limitations are more socially undesireable than legally allowing a form of debt peonage to develop.
I suppose the argument exists that any amount of regulation opens a market for the 'if you don't pay, we break kneecaps' organized criminal lenders of this world. That's a factor, but it ought not to be absolutely decisive - there is, I imagine, a reasonable range.
Quote from: Malthus on August 13, 2013, 04:23:59 PM
The issue is whether such limitations are more socially undesireable than legally allowing a form of debt peonage to develop.
I thought the issue was whether capping rates was a superior alternative to eliminating the industry wholesale.
Quote from: Admiral Yi on August 13, 2013, 04:29:33 PM
Quote from: Malthus on August 13, 2013, 04:23:59 PM
The issue is whether such limitations are more socially undesireable than legally allowing a form of debt peonage to develop.
I thought the issue was whether capping rates was a superior alternative to eliminating the industry wholesale.
There are
three alternatives: regulate, eliminate, or do nothing.
I assumed, perhaps incorrectly, that the total wholesale elimination of the industry was seen by you as undesireable, so that the better alternative was to leave it be.
Quote from: Malthus on August 13, 2013, 04:36:03 PM
I assumed, perhaps incorrectly, that the total wholesale elimination of the industry was seen by you as undesireable, so that the better alternative was to leave it be.
I proposed wholesale elimination to see if anyone could offer up arguments for its continuation. I.e. are there any really good reasons to borrow money at high interest for short periods of time.
Conversely Shelf and the Anglican Church seem to think that short term lending to the working poor is a nice thing, as long as it's done at low interest. Or maybe not even the working poor. Read some article a while back about some English king of the loan sharks. He lent against welfare checks.
Speaking of dodgy loans, when I was in Pensacola, Florida I noticed a bunch of car title loan shops. Never seen them anywhere else.
Quote from: Admiral Yi on August 13, 2013, 04:48:35 PM
Speaking of dodgy loans, when I was in Pensacola, Florida I noticed a bunch of car title loan shops. Never seen them anywhere else.
They're all over around here, too.
Quote from: Tyr on August 13, 2013, 03:27:38 PM
How these things are legal I'll never know :bleeding:
I would rather imagine that it won't be for long.
I think short-term lending at high interest rates has a place.
The problem I have with Wonga and the like is that I don't think their pricing is transparent, I don't think they even try to properly check someone's credit-worthiness and the rolling over troubles me because I think that's a different business than simply lending to someone. As I say I think a problem is that their model, as the Telegraph said, looks like inducing people to break their promise.
But lots of people, not just the working poor, have cash-flow problems. We've got stagnating wages, some inflation in many things but quite high inflation in utilities and rent which means people who are just managing can hit shortages of cash. There's a place for short-term credit there.
I don't think banning them would be a good idea, because I think there's a need and it's an area that you should have a legitimate market in. I'd regulate the roll-overs and maybe long-term interest on a short-term loan because I think that would shift the emphasis back to lenders looking to lend to customers who can and they think will be able to pay them back. And I think it's an area (because it's less regulated than banks and a relatively new market) where some well-funded new entrants, especially with a built in infrastructure like Church Halls, could do well but ethically.
Shelf, I think the whole point of this particular market is it serves people who have no credit worthiness.
And frankly borrowing to pay for recurring expenses like rent and utilities is a recipe for disaster.
Quote from: Admiral Yi on August 13, 2013, 04:43:30 PM
Quote from: Malthus on August 13, 2013, 04:36:03 PM
I assumed, perhaps incorrectly, that the total wholesale elimination of the industry was seen by you as undesireable, so that the better alternative was to leave it be.
I proposed wholesale elimination to see if anyone could offer up arguments for its continuation. I.e. are there any really good reasons to borrow money at high interest for short periods of time.
Conversely Shelf and the Anglican Church seem to think that short term lending to the working poor is a nice thing, as long as it's done at low interest. Or maybe not even the working poor. Read some article a while back about some English king of the loan sharks. He lent against welfare checks.
Well, one good reason is that there is a demand for it and if it isn't legal to service that demand, Guido "we break kneecaps" will. ;)
Quote from: Admiral Yi on August 13, 2013, 04:59:34 PM
Shelf, I think the whole point of this particular market is it serves people who have no credit worthiness.
And frankly borrowing to pay for recurring expenses like rent and utilities is a recipe for disaster.
I agree.
I would assume a rational reason to use such a service is that the worst disaster if you are poor (or rather, excuse me CC, "financially challenged" :P ) is not recurring but predictable expenses like rent, but unpredictable emergency expenses like car breakdowns and the like which the "financially challenged" simply lack the resources to have a fund prepared in advance for.
Quote from: Sheilbh on August 13, 2013, 04:54:51 PM
I think short-term lending at high interest rates has a place.
The problem I have with Wonga and the like is that I don't think their pricing is transparent, I don't think they even try to properly check someone's credit-worthiness and the rolling over troubles me because I think that's a different business than simply lending to someone. As I say I think a problem is that their model, as the Telegraph said, looks like inducing people to break their promise.
They require high interest rates because profiteering off the poor has no real potential for a long-term revenue stream and a very narrow window of opportunity to recoup, unlike more conventional predatory lending practices, which can successfully milk people over a much longer timeline.
QuoteBut lots of people, not just the working poor, have cash-flow problems. We've got stagnating wages, some inflation in many things but quite high inflation in utilities and rent which means people who are just managing can hit shortages of cash. There's a place for short-term credit there.
Well, that's just too goddamned bad for them, now isn't it? They should make more money, and then these meatheads wouldn't be so strapped for cash.
Quote from: Admiral Yi on August 13, 2013, 04:59:34 PM
Shelf, I think the whole point of this particular market is it serves people who have no credit worthiness.
Maybe, but I'm not so sure after the crash to be honest. But banks aren't lending because of new regulations and their own need to deleverage. There's people who can afford to borrow, even at high rates short-term who can't.
QuoteAnd frankly borrowing to pay for recurring expenses like rent and utilities is a recipe for disaster.
I agree. But that's where we are for a lot of people especially since the crash. They're solvent and as the economy recovers they should recover too, but for now there are cash flow problems.
As I say in the UK we're in a period of wages stagnating below inflation, and utility costs (and rental costs in London) that are increasing way above the rate of inflation. That combination means that many people who are in work are getting caught with, as I say, cash flow problems. In this country the majority who use them are young, single and earning a below average wage. I think they're probably most likely to have problems with having the cash when the rent and an unexpectedly big utility bill are due in the same week.
And those are the reasons you need high interest rates, at least short-term. You've got Guido waiting in the corner. But also they're cheaper than other ways of getting the money like unauthorised overdrafts. And I think it's also a useful form of credit to have if the alternative is that people who are in financial difficulty can't use them as a way out (which I think you can, if you're very careful and picky) but are left to get in a worse state.
But using accessible credit to trap people into long-term, high interest rate loans that you never expect them to pay back is unethical in the extreme and, as I say, seems to me to cut away at the point of credit.
That's not a cash flow problem Shelf. A cash flow problem is when you are still solvent (assets greater than liabilities) but because of iliquidity do not have the cash to meet short term commitments. What you are describing is expenses exceeding income.
Quote from: Admiral Yi on August 13, 2013, 05:19:21 PM
That's not a cash flow problem Shelf. A cash flow problem is when you are still solvent (assets greater than liabilities) but because of iliquidity do not have the cash to meet short term commitments. What you are describing is expenses exceeding income.
That's not a cash flow problem. That's a list of reasons why people may go through them from time to time.
If you're on a variable hours contract you can be solvent, have income greater than your expenses and be unable to meet your commitments because you don't have the cash. Especially as I say, if you get an unexpectedly big utilities bill (which happens, believe me :bleeding:) or your payday doesn't correlate with your rent payments (fortnightly against per calendar month, say).
That doesn't include immediate costs like, say, the cost of moving to reduce your rent (6 weeks of rent deposit and a month in advance normally).
Edit: And as I say the payday lenders tend to be more aggressive than other legal lenders, they cost a lot to delay and they're short-term so people often, wrongly, prioritise that repaying that debt over things like rent and utilities.
OK Shelf, you've convinced me of the legitimacy of uncredit-worthy people borrowing money short term. Now what?
On the subject, anyone have any experience with pawn shops? Ever bought anything in one?
I knew a guy in Korea, a Welsh semi-Trustifarian. I say semi because his trust fund was not too bountiful, and every month when the rent was due and before his stipend had shown up he took his TV down to the pawn shop. He also welched on a loan to me, doing nothing to mitigate the stereotype.
Quote from: Admiral Yi on August 13, 2013, 07:00:08 PM
On the subject, anyone have any experience with pawn shops?
When even bail bondsmen look down on you, you're definitely feeding from the bottom.
I've been to a few pawn shops.
If you've been in a Gamestop, you've been in a pawnshop.
Quote from: Neil on August 13, 2013, 07:45:57 PM
If you've been in a Gamestop, you've been in a pawnshop.
Too many nerds. Last time I was in one, the employees got their toy lightsabers out. :rolleyes:
Quote from: Admiral Yi on August 13, 2013, 07:00:08 PM
On the subject, anyone have any experience with pawn shops? Ever bought anything in one?
When I first moved to Florida everyone asked me if I had ever been to that famous pawn in Detroit. I had no idea what they were talking about, but it turns out Mega-Pawn was only a couple miles from where I had lived.
The rates on pawn loans are set low by law in Michigan; so much so that people will pawn their furs just as a means of storing them through the summers.
Quote from: Admiral Yi on August 13, 2013, 07:00:08 PM
On the subject, anyone have any experience with pawn shops? Ever bought anything in one?
Prosecuted lots of 'possession of stolen property' claims coming out of pawn shops.
On the one hand the pawn shop employs are fairly helpful, despite being repeatedly dragged into court. I suppose they know if they aren't helpful the police will make life very difficult for them.
On the other hand the sheer number of such charges suggests that pawn shops are almost inherently and inevitably acting as fences for stolen property.
Quote from: Sheilbh on August 13, 2013, 05:13:26 PM
And those are the reasons you need high interest rates, at least short-term. You've got Guido waiting in the corner. But also they're cheaper than other ways of getting the money like unauthorised overdrafts. And I think it's also a useful form of credit to have if the alternative is that people who are in financial difficulty can't use them as a way out (which I think you can, if you're very careful and picky) but are left to get in a worse state.
I agree, but that is no reason not to have a regulated rate of interest. Here in Canada we have a criminal rate of interest which is, iirc, 60%. If anyone charges above that - including "administration fees" all interest charges on the loan are void. And we still have payday loan shops to fill that niche.
Quote from: Admiral Yi on August 13, 2013, 04:59:34 PMAnd frankly borrowing to pay for recurring expenses like rent and utilities is a recipe for disaster.
Especially when it's so profitable to lead people into those disasters.
Quote from: Barrister on August 14, 2013, 10:34:53 AM
On the other hand the sheer number of such charges suggests that pawn shops are almost inherently and inevitably acting as fences for stolen property.
Yep, here in the lower mainland municipalities created regulations requiring pawnshops to obtain the identity and address of the people providing the goods and keep that information on record; to keep the goods for a specified period of time (to allow any proceeds of crime to be identified before it was sold); and to require the pawnshops to advise the police if they recieved certain items (having mostlly to do with value of the goods).
It had a dramatic impact on decreasing the amount of stolen goods recieved by pawnshops and the rates of home robberies.
Quote from: Barrister on August 14, 2013, 10:34:53 AM
Quote from: Admiral Yi on August 13, 2013, 07:00:08 PM
On the subject, anyone have any experience with pawn shops? Ever bought anything in one?
Prosecuted lots of 'possession of stolen property' claims coming out of pawn shops.
On the one hand the pawn shop employs are fairly helpful, despite being repeatedly dragged into court. I suppose they know if they aren't helpful the police will make life very difficult for them.
On the other hand the sheer number of such charges suggests that pawn shops are almost inherently and inevitably acting as fences for stolen property.
I always wondered if those "we buy your gold!" places were really targeted at thieves, as an easy way to fence stolen jewelry.
I just can't imagine that there is a big enough demographic of people who just want to sell their own jewelry for its bullion value to keep them all in business.
Quote from: crazy canuck on August 14, 2013, 10:46:18 AMI agree, but that is no reason not to have a regulated rate of interest. Here in Canada we have a criminal rate of interest which is, iirc, 60%. If anyone charges above that - including "administration fees" all interest charges on the loan are void. And we still have payday loan shops to fill that niche.
Yeah, I think there needs to be a legal way to get short-term loans for low-credit score people; and obviously the interest they charge there is going to be somewhat steep. If there is no legal payday loans or similar, then organized crime will step in (again) and that's no good.
But the area clearly needs to be well regulated, or we get the kind of things that Sav posted at the beginning of this thread.
Quote from: crazy canuck on August 14, 2013, 10:53:18 AM
Quote from: Barrister on August 14, 2013, 10:34:53 AM
On the other hand the sheer number of such charges suggests that pawn shops are almost inherently and inevitably acting as fences for stolen property.
Yep, here in the lower mainland municipalities created regulations requiring pawnshops to obtain the identity and address of the people providing the goods and keep that information on record; to keep the goods for a specified period of time (to allow any proceeds of crime to be identified before it was sold); and to require the pawnshops to advise the police if they recieved certain items (having mostlly to do with value of the goods).
It had a dramatic impact on decreasing the amount of stolen goods recieved by pawnshops and the rates of home robberies.
We have similar regulations. I have no doubt it helps, but since we continue to see stolen property in pawn shops it is hardly perfect.
Quote from: Barrister on August 14, 2013, 11:24:38 AM
Quote from: crazy canuck on August 14, 2013, 10:53:18 AM
Quote from: Barrister on August 14, 2013, 10:34:53 AM
On the other hand the sheer number of such charges suggests that pawn shops are almost inherently and inevitably acting as fences for stolen property.
Yep, here in the lower mainland municipalities created regulations requiring pawnshops to obtain the identity and address of the people providing the goods and keep that information on record; to keep the goods for a specified period of time (to allow any proceeds of crime to be identified before it was sold); and to require the pawnshops to advise the police if they recieved certain items (having mostlly to do with value of the goods).
It had a dramatic impact on decreasing the amount of stolen goods recieved by pawnshops and the rates of home robberies.
We have similar regulations. I have no doubt it helps, but since we continue to see stolen property in pawn shops it is hardly perfect.
Why are people demanding perfection today?
Quote from: Jacob on August 14, 2013, 10:52:17 AM
Especially when it's so profitable to lead people into those disasters.
What?
Quote from: Admiral Yi on August 14, 2013, 11:37:07 AM
Quote from: Jacob on August 14, 2013, 10:52:17 AM
Especially when it's so profitable to lead people into those disasters.
What?
I am curious what part you that you dont understand
Quote from: crazy canuck on August 14, 2013, 11:37:47 AM
I am curious what part you that you dont understand
The major part I don't understand is how profitability and leading make it especially bad to incur debt to pay for recurring expenses. If there was no profitability and no leading would that make it a real good idea to incur debt to pay for recurring expenses?
Quote from: Admiral Yi on August 14, 2013, 11:45:05 AM
Quote from: crazy canuck on August 14, 2013, 11:37:47 AM
I am curious what part you that you dont understand
The major part I don't understand is how profitability and leading make it especially bad to incur debt to pay for recurring expenses. If there was no profitability and no leading would that make it a real good idea to incur debt to pay for recurring expenses?
Of course not.
But back to my question. Do you understand the point Jacob is making?
I'm not in the mood for this type of conversation.
Quote from: Admiral Yi on August 14, 2013, 12:10:13 PM
I'm not in the mood for this type of conversation.
Take two aspirin then come back and answer the question. :)
Yi, sensing the oncoming pile on, gets in his car for a smoke.
Quote from: crazy canuck on August 14, 2013, 12:11:36 PM
Take two aspirin then come back and answer the question. :)
No.
Quote from: Ed Anger on August 14, 2013, 12:12:27 PM
Yi, sensing the oncoming pile on, gets in his car for a smoke.
Pile ons I've got no problem with.
Quote from: Admiral Yi on August 14, 2013, 12:20:22 PM
Quote from: Ed Anger on August 14, 2013, 12:12:27 PM
Yi, sensing the oncoming pile on, gets in his car for a smoke.
Pile ons I've got no problem with.
It is because they are Canadian, right?
Quote from: Ed Anger on August 14, 2013, 12:21:27 PM
It is because they are Canadian, right?
That neither.
Oh sure, answer Ed's questions but not my simple question.
I'm nice.
Quote from: crazy canuck on August 14, 2013, 12:24:40 PM
Oh sure, answer Ed's questions but not my simple question.
I answered your question.
Quote from: Admiral Yi on August 14, 2013, 11:37:07 AM
Quote from: Jacob on August 14, 2013, 10:52:17 AM
Especially when it's so profitable to lead people into those disasters.
What?
Allowing extremely predatory lending practices (5000+% interest, $2500 principal turning into $14K in short order as per the OP) increases the amount of disaster you get from the recipe of the financially illiterate, the ignorant, and the foolish borrowing for consumption purposes.
You can't, however, expect predatory lenders to refrain from such practices, nor to refrain from soliciting as many marks as possible for their business, since they make good money from the transactions.
Thus better regulation, partially aimed at curtailing predatory practices, is the answer if you want to reduce the amount of disaster that's being cooked up.
Gotcha.
Quote from: crazy canuck on August 14, 2013, 10:53:18 AM
Yep, here in the lower mainland municipalities created regulations requiring pawnshops to obtain the identity and address of the people providing the goods and keep that information on record; to keep the goods for a specified period of time (to allow any proceeds of crime to be identified before it was sold); and to require the pawnshops to advise the police if they recieved certain items (having mostlly to do with value of the goods).
It had a dramatic impact on decreasing the amount of stolen goods recieved by pawnshops and the rates of home robberies.
Can't speak for other states, but NJ requires proof of identity, each item must be logged and made accessible to the New Jersey State Police, and there's a two-week moratorium on selling pawned property to give NJSP a chance to check it against stolen property claims.