Utilities and Payday Loans: A Dangerous Combination
The National Consumer Law Center today issued a very interesting report on how utilities are funneling their most financially-vulnerable customers to payday loan stores.
As the report explains, when utilities send their customers to pay bills in the storefronts of ultra-highcost payday lenders, those customers become targets for predatory loans. The practice is widespread. A review of lists of authorized payment stations of 21 large utility chains found more than 650 licensed payday lenders. To utilities, the use of payday lenders as authorized bill payment agents provides an inexpensive way to satisfy customers’ demands for locations where they can pay utility bills in person and in cash. Payday lenders make the deals in order to bring into their establishments potential customers for their ultra-high-cost loan products. In fact, payday lenders so covet the traffic generated by bill payment that some bypass making arrangements with utilities and offer “unauthorized” bill payment services. Why utility customers? Because there are millions of them. And those who pay bills in person have some of the characteristics--low-income, minority, female, elderly--that make them prime targets for payday lenders.
Among other things, the NCLC report recommends (1) that regulators prohibit utilities from using payday loan stores as authorized payment centers and (2) that utilities discourage customers from paying bills where ultra-high-cost loans are marketed and transacted, and provide them with safe alternatives.
I did enojy your article and found it helpful but don't you think it's just a little bit harsh to call there loans "predatory" ? Just a thought...
Posted by: Payday loan | Wednesday, July 18, 2007 at 08:46 PM
I did enojy your article and found it helpful but don't you think it's just a little bit harsh to call there loans "predatory" ? Just a thought...
Posted by: Payday loan | Wednesday, July 18, 2007 at 08:47 PM