Payday loans are attractive but if you think they are safe you are wrong. Title Loans are a MUCH safer loan and read on to find out why…
For those who live paycheck to paycheck and need quick money to pay a bill, fix an appliance, or just put food on the family’s table, payday loans have seemingly been one of their only options. Though many people realized they were high in interest and fees, not many realize how much they take advantage of those who believe they have no other choices.
Netflix has recently aired a series called Dirty Money about big businesses that take advantage of consumers. The second show in the series, called Payday, is about Kansas City businessman Scott Tucker and exposes the dirty business practices that ended up costing him $1.3 billion in fines and landed both him and his attorney in prison. This was the largest fine ever imposed by the Federal Trade Commission. We highly advise watching it this show on Netflix. It is the very reason why we will NEVER support payday loans and only support title loans.
Scott’s business, which included dozens of different payday loan companies, exploded when it became popular to borrow money over the internet. Though payday loans were illegal in many states, the internet made it possible for those with businesses in states where the loans were legal to lend to consumers in states where it was not. According to Netflix, at the height of his business, Scott had over 1200 employees and was bringing in $400 million in revenue.
While Scott and his associates were milking unsuspecting consumers for their hard earned money, he was living a lavish lifestyle that included a mansion, expensive trips for him and his family, and a multi million dollar exotic race car team. Scott even transferred millions of dollars over to his wife, Kim, from the business’s coffers in one of many shady business practices the government uncovered.
According to Netflix, Payday interviewed several of those who were taken advantage of by Scott’s practices as well as former employees of his business, prosecutors who took on the case, and others who were affected by what many see as a scam. What they found was that, through shell companies and the protection of Indian tribes who offered sovereign immunity to the loan companies for a portion of the proceeds, Scott and his team were able to skirt laws and confuse consumers in monumental proportions.
Under state law, any business that is owned by a tribal community cannot be prosecuted by the state. This is known as sovereign immunity, and it was one of the ways that Scott was able to build his empire. One of the tribal elders is interviewed in the show about how Scott offered him a cut of the company to use the tribe’s name on legal paperwork. The tribe, as well as others, agreed to the terms, though it came to light many years later that they received less than 1% of the loan companies’ earnings.
To trick consumers into signing off on their loans, Scott’s companies gave them paperwork to read that was intentionally confusing and many who took out loans found that they were paying upwards of $950 for a $500 loan. When money was taken out of their accounts each month, the consumers believed they were paying down their loan. The truth was, they were paying service charges to renew the loan because it hadn’t been paid in full and their balance was not reduced. Not only were these consumers paying as much as 450 500% interest on their loans, but they were also kept in the dark about the true terms of the loan in an effort to allegedly extort even more money from them.
One of the consumers interviewed in the show told his story about taking out a $500 loan with one of Scott’s companies to pay for winter heat for his family. After reading the legal documents, this man assumed he would end up paying $650 for his $500 loan by making $75 payments bi weekly. These payments were taken directly out of his account by the loan company. However, he realized a few months later that his balance was not decreasing even though the money was coming out of his account. He really became concerned with the company attempted to withdraw $950 from his account at the end of the loan term. When he called to ask why, he was told that the monthly payments were renewal fees because the loan hadn’t been paid in full and that the full amount plus interest and fees, was an additional $950 on top of the monthly $150.
In addition to angry consumers talking about their experience with the loan companies, the show also interviewed those who had worked for Scott. Former employees talked about how they were told to tell consumers they were located in Oklahoma or Nebraska, where their shell Indian tribes were located. The business headquarters was actually in Kansas City. Employees were also incentivized to keep loan fee details hidden from consumers and created deceptive documents.
Many of these details did not start coming to light until a Colorado woman, who was a victim of one of these unscrupulous loans, contacted the Attorney General. Since payday loans were illegal in the state of Colorado, the scheme started to receive the legal attention it deserved. Though none of the consumers will likely be compensated for their losses, the case serves as a warning that will hopefully help others avoid their fate.
Though Scott defends himself in the program by saying he was just a businessman who tried to capitalize on a consumer need, the federal court system disagreed. Once the ruling came in, Scott lost his business, his reputation, all of his possessions, and ultimately his freedom. He also lost his brother Blaine, his business partner in the company. While the brothers were being investigated by the FTC, Blaine committed suicide.
Payday Loans Today
Although all payday loans today may not scam consumers to the point that Scott’s did, they are still based on a system used to take advantage of those desperate for money. Payday loans charge incredibly high interest rates and often have fees that are not made clear to the consumer at the time. They usually do not have local representation to help a consumer understand the loan they are taking out and have confusing terms that consumers often just agree to so they can get the money they desperately need. These types of loans have gotten such a bad reputation that Google will no longer allow payday loan advertisements on their search engines.
Those who take out payday loans often find themselves paying double or even triple the amount of money they originally requested. If they can’t pay, they are hounded by bill collectors who harass them about making payments and often end up in a much worse situation than they were when they initially applied for the loan.
Title Loans are a Better Option for obvious reasons.
Many of those who need quick cash to pay a bill or keep the lights on feel they have no other choice than to take out a payday loan, even if they realize they are being taken advantage of. Most of these individuals cannot obtain traditional banks loans as they don’t have the credit or collateral needed to qualify. Many also have maxed out credit cards or don’t have the necessary credit to get a credit card in the first place. If borrowing money from a friend or family member is also out of the question, which is common, they may feel that payday loans are their last resort.
Our team at Max Cash Title Loan wants these consumers to know there is another way. A title loan can also get you the quick cash you need without the numerous drawbacks of a payday loan. If you own your vehicle and live in a state where car title loans are legal, you can get the money you need along with peace of mind that you are fully aware of the repayment details.
A car title loan offers an annual percentage rate (APR) anywhere from 32 96% percent as opposed to the 450 500% of some payday loan companies. In addition, we have no hidden fees or penalties. We simply get you the best loan possible by working with our network of lenders and give you a monthly payment amount that you can afford. While you pay back your loan, you can still drive your vehicle we simply hold on to the title until the loan is paid off. With cutting edge technology, our clients can do the majority of the application process online and receive their money within days. The best part? Our services are completely free of charge to our clients as we make all our money from the lending companies we work with.
Payday loan companies such as the ones owned by Scott Tucker were designed to take advantage of people when they are at their most desperate. This isn’t right, and our team at Max Cash Title Loans is committed to helping consumers when they are in an emergency money situation rather than make their situation worse. If you’re in need of quick cash, it’s vital that you steer away from payday loans that could haunt you for years. Contact our professional team at Max Cash Title Loans to see if you qualify.