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You guys are awesome. I’m scrambling to get things organized before I leave for London this weekend, and GRS readers continue to send me great story ideas and guest entries. I won’t get to all of them before I leave (not even close!), but you’ve given me lots of fodder for when I return.
Here’s one I can’t pass up, though. Two readers — Jeremiah and Matt — sent me the exact same story, and both included photos to go with it. It seems that lovable rascal, Gary Coleman, has found a way to recover from bankruptcy. He’s pitching outrageous loans to people who don’t know better.
Whatchoo talkin’ ’bout, Willis?
I haven’t seen the commercial myself, but with the help of modern technology, we’re able to examine the gory details:
I know that fine print may be difficult to read, so I’ve transcribed it for you:
(877) 890-CASH
CashCall.com 24/7
Hablamos EspañolThe APR for a typical loan of $2,600 is 99.25% with 42 monthly payments of $216.55. Credit approval is not guaranteed and depends on the lender’s credit standards. Complete disclosure of APR, fees, and payment terms available on request. Limited documentation required. California loans will be made pursuant to CashCall’s California Department of Corporations Finance Lender License No. 603-8780. Idaho Department of Finance Regulated Lender License 4428. Nevada Department of Business & Industry Installment Loan License NO. IL05343. New Mexico Small Loan License No. 01285. Loans in all other states will be made by First Bank of Delaware (Member FDIC).
“I don’t know why they didn’t just go all the way up to 100%,” Jeremiah writes in his e-mail. Neither do I, but I’ll bet that there’s some legal clause that defines 100% APR as usurious. As if 99.25% is any better. On a lark, Matt actually tried to go through the application process after he saw the commercial, but he was out of luck (or maybe that’s “in luck”). His home state isn’t eligible:
I decided to see how much a borrower would pay for the “typical loan” from the fine print — $2,600 at 99.25% for 42 months. The Bankrate loan calculator won’t take interest rates over 99%, so that’s what I’ve used. Close enough. After three-and-a-half years, the borrower would have repaid the $2,600 principal and $6,743.61 in interest. That’s more than two-and-a-half times the loan amount.
How can the people who own CashCall sleep at night? Just because you can find suckers to borrow money at rates like this doesn’t mean you should loan them the money. Ultimately, however, the responsibility rests with those who borrow money at these exorbitant rates.
Folks, it bears repeating: READ THE FINE PRINT ON ANY DEBT YOU INCUR. Read the fine print on loan documents. Read the fine print on your credit card agreements. Read the fine print on your mortgage. (This latter one is very important. I don’t care if you have to sit in the title company’s office for two hours while the person helping you steams and fumes about being late for dinner — read your mortgage documents before signing them.)
I spent four hours today going over the paperwork for my new credit card before activating it. I found several discrepancies, and called to have them clarified. The banks do not have your best interest at heart. You must look out for yourself. If you don’t, you may find yourself borrowing money at 99.25% from a shady company endorsed by a C-list television star.
(I’m almost afraid to look at the ads Google has decided are appropriate for this post. I’m sure they’re the very thing I’m railing against. Man, I wish they’d let me expand my “banned advertisers” list…)
Addendum: Miranda did some digging and found these commercials on YouTube (which is pretty apt considering the post I’ve written for this afternoon):
Addendum II: My wife pointed out a related article from the local paper. The state legislature recently passed new regulations on the payday loan industry. Now payday lenders have lost interest in Oregon. (Yes, I think it’s a terrible pun too.) They’re packing up shop and leaving because they’re no longer able to charge APRs as high as 520%!
.jpg "The Money Blog Network - Improving your bottom line")
July 10th, 2007 at 5:12 am
I think C-list is very generous.
July 10th, 2007 at 5:16 am
That’s .. unbelievable. I know there are federal regulations about this stuff, but maybe it only applies to brick & mortar operations?
In any case, I agree with wondering how these types of people can sleep at night. I felt bad enough at the thought of loaning money at 12% on Prosper.com!
July 10th, 2007 at 5:20 am
I get a “work at home for 175 dollars/day.” Woohoo!!!!
They’re running my credit card numbers now to see if I’m eligible.
I also want to thank you for the sponsor links in the side bar. The other day I found a home equity loan for people with bad credit with only two mouse clicks.
July 10th, 2007 at 5:40 am
God bless google ads.
Fwiw, Casey Serin, our favorite fraudster, took out a 10K Cashcall loan that has ballooned upwards to 42K in payments due.
Cashcall tactics are notorious. Basically they get the person mired in debt, expect default, use tactics to get money, file, claim assets.
Horrible company
July 10th, 2007 at 6:06 am
My husband and I saw this ad the other day, and paused it to read that fine print. We had the same question - how can they sleep at night? It was the same with a home loan commercial - the fine print said something to the effect that after the first year, your monthly payment could go up exponentially. It’s sad that these companies prey on the less fortunate like this.
July 10th, 2007 at 6:45 am
Jon: Most of the regs are done on a state-by-state basis. The only federal regs on these payday loans are those made to military personnel. These loan operators have been taking advantage of the conditions of the families of our service men and women!
These is reprehensible, and it should be stopped. Before taking a loan from such a place, though, it is important to exhaust all other options. I love how this company is also seeking to take advantage of immigrants who may not know better.
July 10th, 2007 at 7:13 am
What’s happened to the usury laws that used to be in effect? I think a few states still have them, but not many.
The main thing is that due to our federalist system, we have this disconnect in banking where some stuff is regulated at the federal level and some at the state. Sorry to inject politics in here, but what’s good for the goose is good for the gander and you’d think Oregon’s law would be good for the rest of the US (Except the full service pump. Ridiculous that you have to pay all that extra so someone can pump your gas for you.)
July 10th, 2007 at 7:14 am
Well, the idea of payday loans is to loan money for a couple weeks, until your next paycheck. Sure the interest rates are insane when you look at them extended over an entire year, but what accrues over two weeks is more reasonable. The problem is that people don’t use payday loans as advances on their paycheck, they roll them over and extend them until they are REALLY in trouble.
The problem isn’t high interest rates, the problem is taking advantage of people who obviously can’t manage their money. It looks like these laws are carefully designed to shut down the payday loan industry. I can’t say I feel sorry for them.
“Doctolero, a medical aide in Southeast Portland, and her husband have struggled to pay off several payday loans. They paid off one $685 debt last week with plans to immediately take out another loan to attend a wedding in Los Angeles.”
This boggles my mind. These people just managed to pull themselves out of the quicksand, and now they plan to turn around and jump right back in?
July 10th, 2007 at 7:31 am
I wonder if Gary Coleman borrowed money from these guys, couldn’t pay it back, then they decided, hey, do some commercials for us and we will take the debt off the books.
July 10th, 2007 at 7:45 am
I obviously am in the minority, but I don’t have a problem with these types of companies. I read a blog entry (sorry, can’t remember where) about Prosper. Loans made to the lowest credit grades on Prosper, despite their high nominal interest rate, actually had a negative rate of return, due to the extremely high rate of default. Prosper loans made to the lowest credit grade would have to have a nominal interest rate greater than 36% just to break even. This isn’t even counting possible profit.
I read an interview with one of the top executives of one payday loan company — I believe it was Cash Advance America. He claimed their profit margins were only 9%, roughly in line with the average company. Despite their high nominal interest rates, profit is not exhorbitant.
I will avoid passing judgment on customers of these companies. Maybe they are bad at managing money; or maybe they simply ran into medical emergencies. Whatever the case, the simple fact is that people with low credit grades have a very high rate of default, and if companies expect to make any profit at all, or even break even, interest rates must be high. Is 99% too high? I don’t know, as I don’t see CashCall’s balance sheet, but simple economics would say it isn’t too high. If a company could make money charging a lower interest rate, I’m sure there would be plenty of companies trying.
July 10th, 2007 at 7:58 am
Since People are not taught how to managed money in high schoool, They fall for these outrageous loans. Where is our Federal Govt protecting us from these sharks?
This is the same mentality that wants less govt. The Banks made $50 billions, that’s right $50 billions in late fee and high interest credit cards.
July 10th, 2007 at 8:01 am
Well, yeah, you’re right. No one really knows how much money these companies make. But considering they only need like 10 payments to make up principal (with 32 after that as “profit”), I’d doubt they’re too hard up. And with the number of these springing up on each street corner, it’s probably pretty lucrative.
Besides, they’re complete swindlers. What kind of worshipper of laissez faire must you be to be ok with people essentially cheating others out of their money? Sure, it’s their responsibility to know what they’re getting into, but at a point, some responsibility lies of the swindler, not just the swindled.
July 10th, 2007 at 8:30 am
Ashwini Says:
July 10th, 2007 at 5:12 am
I think C-list is very generous.
Ha ha! That’s exactly what I was thinking! Kathy Griffin considers herself D-list, so Gary might be or G- or H-?
Too funny, but wow, you really just can get much lower than this.
July 10th, 2007 at 8:30 am
I think I’m in the minority with Rick on this one. I’ve worked in sub-prime mortgage loans for a while, and so I’ve seen the inside of the business. Believe me, they are not making money hand over fist like you might think.
The thing that several people have pointed out here is that these people do not know how to manage their money - thus they are at a huge risk to not pay you back. A good example of this is New Century Mortgage - one of the reasons they went under is that they had too many first payment defaults on their books. That’s right, they went through all the trouble and expense of giving someone a loan, and didn’t even get a first payment!
Second is the overhead of these small loans. it takes a lot of work to generate and service a loan of only 2,600. The same work as if it was a 260,000 loan.
People want to say for-shame on these companies for taking advantage of these people who have trouble managing their money, but look at the risk they are taking in providing these services. How many of these people are actually capable of paying back these loans?
Let’s put it another way: If you had a neighbor who’s son had a garage band, and he says if he could just get $10,000 to pay for a road tour then they would make it big and he would really pay you back (this is after seeing him borrow money several times before and not pay it back), would you lend him the money and expect to ever see it again? What kind of interest rate would you expect if you knew there was a 30%, 50%, or 80% chance of never seeing your money again?
Are you the mean neighbor for not lending him the money so he can make it big? OR are you the mean neighbor because you’re expecting him to pay you back $20,000 when they do make it big? Or maybe you just send him to Cash Call and they can lend him the money.
July 10th, 2007 at 8:39 am
I’m glad someone else caught this. I couldn’t believe my eyes when I saw the outrageous interest rate. I also love those commercials that say “bring us your car title and we’ll give you cash.” And the commercial looks like they’re giving cash to people so they can go out to dinner or buy a new outfit. What’s even worse, these commercials are all over the place when you’re watching the court tv shows like Peoples Court and Judge Mathis. You dont see these commercials on, say, NBC or ABC.
July 10th, 2007 at 8:51 am
Man, these kinds of companies make me sick to my stomach. What makes it worse is that people actually get loans from loan sharks like this.
July 10th, 2007 at 8:54 am
i find it a bit interesting that paying about 2.5 times the loan amount is bad in this case but okay for a 30-year fixed-rate mortgage.
July 10th, 2007 at 9:07 am
If you’re the kind of person who takes financial advice from bankrupt Gary Coleman, you might actually be saving by taking out a one of these 99% interest loans. Perhaps your alternative was to go with MC Hammer or Willie Nelson loans at 520%!
July 10th, 2007 at 9:10 am
Ryan: If someone truly had a medical emergency, or some other type of emergency, I believe it would be immoral for a company like CashCall to take advantage of the person. But if the clients are really using these loans to go out to eat, buy new clothes, or go on a vacation, I really don’t see anything wrong with taking advantage of others’ stupidity. There is a difference between ignorance and stupidity. I think the majority (though certainly not all) of the customers of CashCall and other similar establishments are not ignorant about handling money; they are stupid, as is evidenced by the purchases they make with these loans.
Someone mentioned Casey Serin. Would anyone here really call him ignorant? I would honestly classify him as acting stupidly and foolishly. You say that the first ten payments will pay off the principal; the final 32 payments are “profit”. But how many people with the lowest credit ratings will even make these ten payments? How many paymetns did Casey Serin make on his loans? I believe he made fewer than 10 on most of his loans. His lenders lost hundreds of thousands of dollars.
I think that considering Casey Serin helps put this into perspective. Let me ask you, if you were to loan Casey $5000, what rate would you want to loan it at in order to ensure at least a nominal profit? It is not unreasonable, I would think, to loan it at “usurious” rates of at least 50% APR in order to ensure you don’t lose it. These are unsecured loans. You cannot go and reclaim the property if the client doesn’t pay. Now, let’s say you did loan Casey $5000, and he stopped making payments. Would you just shrug it off as “the cost of doing business”? Or would you call him up, trying to get him to repay you? Would you use every legal means necessary to recover your money?
Though payday lenders might share a small portion of the blame, I believe at least 90% of the blame should be placed on the people that frequent these places. Learn to live within your means; build a sufficient emergency fund. And you will never need to be a customer of a payday lender who “is just trying to rip you off.”
July 10th, 2007 at 9:12 am
Why Gary? Why!? haha
thats just ridiculous. They must be getting people to use there services to be able to have national commercials like that.
I feel bad for those getting this loan…
July 10th, 2007 at 9:22 am
Yes, but a mortgage is paid off over 30-years. This sample loan is paid off over three years. That’s an important difference.
@Rick
Great questions. As for Casey Serin: I would never lend him money. But then I have access to more information about his character and credit history than most places have for those who apply for their loans.
There’s no question that the root of the problem is poor personal finance. The question is: how can we go about educating people about money? Is there an effective way? Or is the piecemeal system we employ now the only real option?
July 10th, 2007 at 9:24 am
I have to disagree that Cashcall should be viewed sympathetically. Its not the interest rates that I care about but that they are targeting a specific demographic that is both desperate and ill-equipped with information to actually understand fully the ramifications of said loans (Just like the sub-prime loan industry).
If it can be argued that the folks taking out these loans knew full well exactly what was going on, fine, then they made an informed decision.
Cashcall et. al. are not in the business of providinga service to informed folks. They provide loan sharking to desparate folks. There is good reason why you only see these places in poor neighborhoods and military bases, or on late night tv.
July 10th, 2007 at 9:25 am
i find it a bit interesting that paying about 2.5 times the loan amount is bad in this case but okay for a 30-year fixed-rate mortgage.
–Over time inflation eats away at a fixed rate mortgage, plus these loans are short-term. You’re completely missing the component of time here. The dollar I pay with in 6 months is worth far more than the dollar I pay in 30 years.
July 10th, 2007 at 9:27 am
@J.D. - You’re right, I would much rather pay back 2.5 times an original loan amount in 3 years than over 30 years. Point well taken.
July 10th, 2007 at 9:49 am
“How can the people who own CashCall sleep at night?”
On the finest silk sheets, their pillows stuffed with shredded 100 dollar bills, while their dedicated manservant gently fans them with fans built of feathers from specially raised caviar-fed albino California Condors, only 2 of which exist in the world, and Brittany Spears herself sits in the corner and gently sings a lullaby.
Just out of curiosity, why do you ask?
July 10th, 2007 at 10:11 am
@icup - I was with you until you got to Britney. Surely they can afford someone better than her? Hell, even I could afford to rent her for a night.
July 10th, 2007 at 10:12 am
I like how creamcitian put it with the home loan example. I think we could all have done without them showing you what you will pay with interest over your 30 year home loan. What kind of legal standing do these cash call places have?
July 10th, 2007 at 10:32 am
Wow, I’m glad I’m not so rich that I have Brittany Spears singing in the same room with me.
July 10th, 2007 at 10:33 am
Honestly, there’s nothing that bothers me more that do-gooders who want to save everyone from themselves. Don’t you realize just how arrogant you sound? “It’s outrageous! No one should be allowed to charge 99% interest rate! There aughta be a law to prevent that.” The implication is that people who get these loans are too stupid to know better.
Ugh!
No one said we should feel sympathy for Cash Call - only that we shouldn’t condemn them for satisfying the niche they’re serving. It’s called business, and, for the most part, should not be viewed positively or negatively.
Tim said is pretty good in his post. If we are outlawed from loaning money to bad credit risks at a high enough rate to be profitable, then money will not be lent to those with below average credit. That means that new band that is starting next door, would never make it big because no one wanted to give them the startup money at 10% (or whatever rate the high priests of virtue find morally acceptable).
So in your world, i guess it’s OK if poor people don’t buy cars, or get medical care, or travel accross the country to go to their Mother’s funeral. Heck, they’re better off not spending all that money on the interest. Those stupid poor people just don’t know what’s best for them, like you guys do. Thank God they have you to look out for them, right?
Well, I said it bothered me…end rant.
July 10th, 2007 at 11:02 am
I applied for a credit card through my credit union and got approved, see if I’m being screwed. please somebody.
https://online.elancard.com/customizedPricing/elan/collegeRewards.do?page=main&locationId=7380
July 10th, 2007 at 11:11 am
I posted this math on LazyMan’s blog before.
Let’s say annual default rate for payday borrowers is 40%. You invest $1000 so you expect to lose about $400 right of the bat. So in order to just break even, the borrowers on the $600 that pay you back will have to pay 66% interest ($1000 / 600).
Now of course, break-even is losing money when you can get 5% in CDs or money markets or online banks. Now the math becomes $1050 / $600 = 75%.
But wait, how are you going to run a business with no rent, no employees, no expenses? Who’s going to service the loans? And if you’re going to go into a risk business, you have to be matching long-term stock returns or otherwise you might as well buy some mutual funds. So now the math becomes: ($1M + 10%) / ($600K - $50K) = 100%.
If borrowers paid back their loans, companies would lower their rates to compete for business. As is, 99.25% appears to give market returns if you are willing to put $1M of your money into starting a payday company although at a much higher risk from economy downturns. At only 10%, I’d much rather put my money into index funds.
July 10th, 2007 at 11:32 am
Its the advertising techniques rather than the continued existence of such places that are a bad thing.
FWIW I get adverts for ’secured loans’ on this post. I don’t know if you get secured loans over there, they are loans that are secured on property and they are often used by people consolidating credit card debts. They are also use suspect ad techniques.
July 10th, 2007 at 11:48 am
My initial response is to feel disgust and outrage at Cash Call. That disgust never fully goes away, but where is the concept of personal responsibility and choice? It’s insulting to those that get these loans to say that they all are ignorant of the terms. Perhaps some are, and I would more be of the mind to support public advocacy groups that seek to educate citizens about finances than to condemn and seek to ban companies like these.
I have felt the same mixed emotions regarding the sub-prime mortgage market and the number of home-owners currently in trouble. Why did they accept the loan in the first place? If that was the only way they could afford a house, why didn’t they continue to rent? I could probably never work for a company like Cash Call, because I wouldn’t be able to sleep at night. But my husband works for a credit card company, and I’m sure Dave Ramsey wonders how he can sleep at night. His ire for the four major credit card companies is open for all to hear. I guess we all have different standards of what might keep us up at night.
One more thing, the “fine print” that lists the 99.25% APR on the screen is hardly small. How can you claim that people wouldn’t know what they were getting themselves into?
July 10th, 2007 at 12:33 pm
It’s an interesting debate. I’ve read the archives of this blog and it seems in general you are against the high-interest loan industry in general.
On a positive note, one should notice that the company does prominently display its rates on the commercials and website. This is much better than other competitors (such as “refund anticipation loans” and payday loans).
CashCall has come under fire for its aggressive collection tactics. Check out ripoffreport.com. I’m trying to investigate this.
July 10th, 2007 at 12:37 pm
The people who take out these loans often do so with no intention of paying them back. NO intention. Ditto for many of the ‘baby credit cards’.
I worked with a large group of transient employees for several years and would often hear about how many credit cards they had gotten recently and the wild nights these cards had paid for.
Through the week, the more prudent would sell cigarettes to the others because the others could not afford a full pack … but would find 50 cents ($10.00 / pack) for a smoke after lunch and another 50 cents for one while waiting for the bus ride home.
Temper your criticism with caution … these are very risky loans.
July 10th, 2007 at 1:59 pm
It has been mentioned before, but these are the sky-high rates that these companies have to charge to stay in business because so many people default. If that wasn’t the case another company would charge 96% interest and get rich that way. And then another would charge 88% to beat out the 96 interest guys. This would continue on down the line until you got to a rate where it’s no longer profitable to go any lower. Sadly, CashCall’s profit line is probably anything over 90% because of the defaults. I’m sure that payday lenders have lost interest in Oregon because they can’t run their business at a profit.
My wife shuts down hospitals that don’t adhere to safety and quality guidelines. Is a city better off without the hospital at all or a bad one? Are high risk borrowers better off with payday loans or without them? I think it’s a pretty tough call - especially when a bounced check even by $1 can cause a huge percentage in overdraft fees - much more than 99% and probably even more than 520%.
July 10th, 2007 at 3:16 pm
People living in poverty, working one or two jobs for low wages, are the target market for payday lenders. The social justice organizations in my state are always working to increase regulation for this type of business, because they prey upon people with no emergency fund or credit cards.
Want to stop payday lending? Work towards having people earn a living wage. Work towards providing universal health insurance coverage. Read Barbara Ehrenreich’s book “Nickel and Dimed” if you’re convinced that the problem is “poor money management.”
July 10th, 2007 at 3:23 pm
While pinpointing the larger structure of society and how it reinforces poverty, Barbara Ehrenreich does also comment on the poor money management she noticed among the minimum wage employees she encouraged. It is a multi-faceted problem, and the odds are stacked against the lower classes. But that doesn’t mean certain people couldn’t be better at managing their money.
July 10th, 2007 at 3:45 pm
There are many things out of your control. You can’t control the economy, you can’t control prices, you can’t control eventual failure of machines & devices. But you are in control of the management of your money. You can wait for government and society to fixed all the wrongs that surround you. Or you can do your best to control your destiny.
Here’s a study that shows even the ultra poor in this world earning $1/day or less still somehow find ways to spend 25% of their income on non-necessities.
http://www.economist.com/finance/displaystory.cfm?story_id=9080048
July 10th, 2007 at 4:05 pm
I guess what really upsets me is that Gary Coleman is putting real loan sharks out of business.
These “payday” loans sound all happy and friendly while “loan shark” sounds sort of scary. People are more likely to request high interest loans and when they do they’ll definitely choose the payday loan over the loan shark. The payday loan people probably don’t even show you the fat motorcycle dude with the baseball bat until after you’ve defaulted. Truth in advertising is important, and I think the good old loan shark with the prison tats and blood shot eyes exemplify this.
Good for Oregon and long live the loan shark.
July 10th, 2007 at 7:57 pm
Jill — great comments in both your posts. I agree completely.
MossySF — excellent article from the Economist. Thanks for posting. Very interesting survey findings…
July 11th, 2007 at 6:15 am
I certainly don’t agree with the commercial or the company but I feel kind of bad for Gary Coleman. From what I understand his parents spent all his Diff’rent Strokes money and he has no real skills (yes, I guess he could just go get a job) besides his ‘celebrity’.
July 11th, 2007 at 10:44 am
Gary Coleman needs to get a job like most Americans.
July 11th, 2007 at 2:25 pm
[...] Whatchu talkin’ ’bout Willis?! Gary Coleman has found a way to get himself out of bankruptcy by sending others on their way to bankruptcy… Gary Coleman Pitches Outrageous 99.25% Loans [...]
July 11th, 2007 at 5:06 pm
Wow. That’s hilarious.
July 11th, 2007 at 9:46 pm
Wow, that is just criminal!
July 12th, 2007 at 9:15 am
[...] One more reasonto despise Gary Coleman It seems that lovable rascal, Gary Coleman, has found a way to recover from bankruptcy. He’s pitching outrageous loans to people who don’t know better. [...]
July 12th, 2007 at 12:55 pm
Angie said: “Want to stop payday lending? Work towards having people earn a living wage.” I just don’t get the whole “living wage” idea. Don’t these people know any math? Why not just pass a law requiring everyone to get paid more than the average wage amount?
(For the mathematically impaired, I’d be happy to explain the flaw in that logic if needed)
July 12th, 2007 at 2:21 pm
Dave: there’s a difference between living wage and average wage. Living wage advocates want a minimum wage of around $14/hr, which is what they believe to be the minimum that someone can comfortably live.
There are plenty of flaws in this argument, but that it is not an “average” wage is not one of them. One of the flaws is that such a “living wage” would raise prices. For example, already labor costs are by far the largest expense for fast food restaurants. If we doubled labor costs, McDonalds would have to nearly double the cost of their food. Could you imagine paying $12 for a value meal?
The largest flaw is that it is not the government’s responsibility to interfere in business. Supply and demand economics will determine the proper price for labor. Practically speaking, if you’re not making enough, don’t complain to the government. Go find a new job.
July 12th, 2007 at 2:53 pm
Rick - I understand and agree with what you are saying. I was just throwing out the concept of paying everyone above average as sort of a joke. I think the “living wage” is as good an idea as the “comparable wage” - remember that one? It started out as a feminist idea of a way to redress inequities in pay across genders. The idea was that you find comparable male-dominated jobs (i.e. prison guard) and female-dominated jobs (i.e. teacher) that require similar levels of education/training and pay both jobs the same amount. As best I can recall, someone did propose that prison guards and teachers were comparable jobs. I know kids can be rotten at times, but I seldom hear of any trying to stab a teacher or fellow student with a sharpened toothbrush!
July 12th, 2007 at 3:19 pm
Glad we agree. Actually, despite that I put your name on my post, I was mainly addressing Angie Hartford’s comment.
July 12th, 2007 at 5:53 pm
“The people who own CashCall” are one Paul Reddam, of Fountain Valley, CA, the same guy who founded Ditech. http://www.ardenrealty.com/aa_news.html#Cashcall
July 13th, 2007 at 8:34 am
Anyone who takes financial advice from Gary Coleman deserves what they get!
LOL
July 13th, 2007 at 9:41 am
[...] I think this is the Gary Coleman of yesteryear - he’s pitching loans for debt-slaves: It seems that lovable rascal, Gary Coleman, has found a way to recover from bankruptcy. He’s pitching outrageous loans to people who don’t know better. Bankruptcy for Fools [...]
July 13th, 2007 at 9:54 am
Gary Coleman Pitches Outrageous 99.25% APR Loans…
This story has been submitted to Stirrdup. Your support can help it become hot….
July 13th, 2007 at 10:42 am
I don’t know if anyone else noticed but at the end of the commerical, a smiling Gary crashes his car into something offscreen. That along with the overal sleaziness of these type of commercials made me think ‘why would someone want to put themselves into a situation where they are sure to crash?’
July 13th, 2007 at 10:55 am
Glad someone, somewhere, has publicized this, altho’ the folks who most need to read it probably never will. All I was able to see when I viewed the commercial for the second time was that “99.25%,” which was enough to realize what an awful scam this is.
And they must be making decent money off this, otherwise they couldn’t afford to buy all that tv time.
July 13th, 2007 at 12:54 pm
Abubuka pitches outrageous %99.25 APR loan…
Abubuka pitches outrageous %99.25 APR loan…
July 13th, 2007 at 1:18 pm
[...] Gary Coleman Pitches Outrageous 99.25% APR Loans [...]
July 13th, 2007 at 3:49 pm
Anyone here saying laissez faire economics and free-market need to understand that offers like this are considered a break-down of a free market system. As the sellers of these loans have perfect information and the buyers don’t, there is a condition of imperfect information, thus creating a market inefficiency. This is no good for anyone except the loaners themselves. These loans cost sociecy more than they benefit it.
July 13th, 2007 at 6:20 pm
Shame on the TV show’s that accept advertising from these guys as well. When I commented on this commercial last month, the commercial was appearing on a “TV Judge show.”
http://lawramblings.blogspot.com/2007/06/unscrupulous-lender.html
July 13th, 2007 at 6:42 pm
“After three-and-a-half years, the borrower would have repaid the $2,600 principal and $6,743.61 in interest. That’s more than two-and-a-half times the loan amount.”
Sure.. but that’s the same as my mortgage. My mortgage might only be 5% or so, but over 35 years I’m paying over double the amount back.
There are people out there who really need these hideous, sub-par loans who can’t get money any other way. As Zimbabwe is demonstrating, you can’t force people to lower prices, so if 99% is actually competitive for some people, then it’s the best of a bad deal.
July 13th, 2007 at 10:01 pm
Gary Coleman Pitches Outrageous 99.25% APR Loans…
And laughs about it in the ad….
July 14th, 2007 at 1:48 am
I especially like how he basically admits to being rejected by his entire family in one of these ads.
Actually, that’s really sad…
July 15th, 2007 at 11:18 am
I’m so tired of people yelling “the government must protect us”. Lets face it if you’re going to one of these places for a loan, no one else is going to give you a dime due to your past performance. PERSONAL RESPONSIBILITY!!! If you decide to enter in a 99% loan, why should I care. If you knew you couldn’t pay back a loan, why did you take one out. To buy rims, chinese crap at Walmart, or just to pay your other bills?
Although, I will say, maybe these people are just using the US government as their financial model. 8.88 TRILLION DOLLARS and climbing 1.3 BILLION per day. Who cares about a 2 grand loan. HA HA. The US is bankrupt. Bring on our Chinese occupation. Will we be called freedom fighters or terrorists by the Chinese?
July 15th, 2007 at 2:43 pm
[...] 99.25% APR, wow, that’s better than the last one I asked, they wanted 100%. [...]
July 17th, 2007 at 6:31 am
Here’s the APR’s per CashCall.com:
http://www.cashcall.com/General/Rates.aspx
99.25% is their highest, but 59.95% is their lowest. Yikes!
July 25th, 2007 at 5:21 am
This ad is only one of hundreds that are permitted to air, by the FCC, in which exploitation, deception and false-claims appears to be the prime result.
What this country sorely needs is a review committee [similar to the rating system of overtly sexual content, violence and other basically objectionable content for films and TV shows]to catch and deny airing such ads based on thier morality and true purpose of taking advantage of mentally backward individuals.
August 1st, 2007 at 2:54 am
What funny about payday loans is that they were introduce to hep with bills and unforseen accidents like cars breaking down now it like people get them to show someone a good time or to travel of some sort but when companies plan on using this to their advantage people call them mean and crooks. look when people use to borrow money from loan sharks it was for what to gamble or do something real stupid and it was leagl then , somebody just decided to make this legal as possible. now i do fault the compnay for getting a little to greedy but i balme the consumer more becuase they have bad sspending habits. these companies do have standards to loan money beacuse you do have to make a certain amount of money the thing is when you constantly recoup on a old loan that is where the interest piles up because someone decided to spend the money to pay it off , so will just pay the weekly interest.
August 2nd, 2007 at 1:31 pm
[...] read more | digg story [...]
September 12th, 2007 at 2:25 pm
My wife and I had to go to these Jerks 3 years ago when long distance moving. We borrowed the usual $2600.00.thus far we have paid 30 pymts. of $199.00.Quite frankly, I’m sick about it,BUT, I didnt read the fine print, just needed money now.
The good part of all this is,I only have 12 pymts left and I’ll be free to kick myself in the ass for years to come.Buyer Beware!!!!!
September 13th, 2007 at 4:36 am
Nural “CEO”:
What company are you the CEO of?? Boy, if your grammar and spelling are indicative of it’s product I’ll surely place you right up there with payday loans!!!!!!
September 22nd, 2007 at 10:48 am
In the U.S. interest rate are going lower, Gold is going higher, Oil is going higher, inflation is going higher, the dollar is going lower. What is wrong with this? Everything! At some point the FED is going to have to raise rates bigtime. We are in a very, very, precarious situation at the moment. I think Gold will tripple to over $2,000 an ounce when the market finally wakes up and sees the real inflation. Last I checked a lower dollar = higher import prices. There is no inlfation deflator here. With commoditioes on fire you can forget about that. Bernanke should have never lowered rates last week. However, the Fed might be doing something that few have talked about. Maybe the Fed has abandoned the dollar the crush teh trade deficit. Good luck, it will take 20 years to correct our 6% of GDP trade deficit and move it back to under 1% of GDP, unless you want to seriously disrupt the global economy. We are in for tough times people. Very tough!
September 27th, 2007 at 1:36 pm
[...] personal-finance blog Get Rich Slowly ran the numbers. Let’s say you take out a $2,600 dollar loan at 99% for 42 months. Sure, you would pay off [...]
October 15th, 2007 at 7:48 pm
Actually, you don’t need a calculator: They have the calculations on their website at https://www.cashcall.com/General/Rates.aspx. Note in California, you can borrow up to $10,000 from these guys. However, they’ll only charge you 59% interest.
Let’s see 42 payments at $216.55 comes down to $9,095.10 (and to be fair, it’s only at 96% interest. The 99.25% is the compounded APR rate.)
What is sad is reading the testimonials at https://www.cashcall.com/Testimonials.aspx. The people are so grateful. Some talk about the sudden “need” for quick cash. One guy wanted to buy a car. Wait till they try to get this monkey off their back.
BTW, this is a service of the First Bank of Delaware (http://www.fbdel.com). If I had an account with them, I’d cancel it immediately.
If you think this guy is slimy, check out BlueHippo.
October 16th, 2007 at 7:17 am
One aspect of these outrageous loans that I have not yet seen discussed here is their use by drug dealers.
Has anyone ever looked at the people who do pay back the entire amount a week later?
I have heard rumors that some of the heaviest users of these quick-loan businesses are individuals who use the dough to purchase a large amount of drugs/contraband/whathaveyou, which they can then turn around quickly, make a profit, and get the money back to the lender.
Many of these places pride themselves on how easy it is to get money, has anyone else on this thread heard anything about situations like this?
October 18th, 2007 at 7:53 pm
Dave—No, the students don’t use sharpened toothbrushes. They use guns.