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Loan outlets target poor, advocates say

ERIKA BEAUCHESNE

From Wednesday's Globe and Mail

Latest comment posted at 10:49 PM EDT 28/11/07

Government comes under fire for lack of regulations for fringe lending companies ...Read the full article

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  1. Michael Powers from Canada writes: a 2007 Pollara survey of 503 Ontario Payday Loan customers, which found 68 per cent were employed full-time, more than half had postsecondary education, and only 42 per cent earned less than $50,000 a year.

    I can understand how a poor individual can get stuck needing the services of scummy companies like these but better educated people with steady employment????
    It is difficult to protect people from themselves so pass laws to protect the poor but the other 68% should be on their own.
  2. Kevin Desmoulin from TO, Canada writes: Ya it is too bad That these pirates are out there. but it is up to people to be reasonable with their money. I do a couple months getting loans like this and it becomes a habit and at times a necessity, but it is better to tough it out or borrow the money off your friends or families.
    No one is walking up with a gun and making people get these loans.
    I know poverty is tough and if their was a livable working wage and reasonable rates for social services and maybe if banks would take on some social responsibility most likely these places will not exist.
  3. Stand up for Social Justice The Canadian Way from Canada writes: I read a book earlier this year," The Merchants of Misery". To get a real good understanding of this industry, one should read this book.
  4. Vote NDP in the next federal/provincial election. from Toronto, Canada writes: This is why government intervention is needed on these payday loan companies. They charge exorbitant interests on such low amount of loans (to the tune of the average of $500) and only for a week. I hear stories where the annual interest rate is about 700,000% of the original loan per annum. This has got to end.

    Either the payday loan comapnies are shut down.

    Or institute a 20% per annum interest rate on payday loans (like Visa, MC etc...) and ban all fees associated with these loans (exculding interest rates)
  5. Anthony B from Sydney, NS, Canada writes: Do the bandits who work at these "money stores" wear masks?

    Kevin Desmoulin from TO, Canada writes: "..... it is up to people to be reasonable with their money .....No one is walking up with a gun and making people get these loans"

    Kevin: One could say the same about a host of other questionable business practices (e-mail and Internet scams, false advertising, investment frauds, etc) but I don't hear many people say we should let them flourish. Perhaps you are so astute that you have never been suckered into anything.

    C'mon, McGuinty, I thought one of society's roles was to safeguard the poor and vulnerable from exploitation. Or is it only the rich and vulnerable that merit protection from those who prey upon them?
  6. Andrew Pakula from Toronto, Canada writes: If 68% of people using these stores make $50,000 why don't they have overdraft protection for when they are short? If you are making that much it should be fairly easy to get, its much cheaper and easier. If its because these 68% of people have horrible credit then they have only themselves to blame, at that income there they should have no reason to use these stores.
  7. Kevin Desmoulin from TO, Canada writes: Anthony B from Sydney, NS, Canada writes: Do the bandits who work at these "money stores" wear masks?

    No they do not of course I disagree with this practise because they very know it can be a trap.
    Exorbitant rates and ease of getting the loan, etc

    Ya I do say that same stuff about the wild world of internet scams and if I have the time I actually try to go after them.

    and Yes I have been described as astute but anyone can get suckered

    My point is that I do not agree with these pay day loans but if one can not go afford the high rates of these loans, DO not go in there to get one.
    Like the gent in the article, after 10 years He has not gotten enough id for a bank account?
    I am compassionate but these days one better learn how to take of one's self bc with the lack of services it is all the more reason to keep one's act together.
    Treating people like babies does not really help them.
  8. Cherill Johnston from Small Town Ont., Canada writes: I live in a very small city, with what seems a high proportion of working poor and families receiving assistance or diasability pensions. There are 3 or 4 of these loathsome places in a city of 20,000. Yes people, me included, should be more aware of the ongoing cycle one can get into when they borrow from places like The Money Store. However, when you live on ODSP (Ontario Disability Pension) of $963.00 a month , and your rent is $650 to $700 a month plus heat and utilities, there will be times when a pensioner will succumb to borrowing to pay the heat bill or to buy food. The provincial government needs to put a ceiling on the interest and payback schedules that these loan places operate under. As well, paying ODSP recipients a living income and funding more geared to income housing would be a very positive way of putting these loan shark places out of business.
  9. Mark Tilley from Brampton, Canada writes: So people without any ID can't get bank service but they can get gov't assistance?? How do we know they're entitled? Can't their worker help them get proper ID?
  10. art in calgary from Calgary, Canada writes: Vote NDP in the next federal/provincial election

    let's nationalize these businesses, as it seems this should be the business of government.

    or let sharia law apply, no interest!
  11. it is legal robbery from calgary,ab, Canada writes: These companies should be illegal right across Canada. They take advantage of those who can least afford it. Banks should not be allowed to refuse to cash any government cheque, even if that person doesn't have an account. All that should be required is a picture ID and the governments should provide such an ID to anyone receiving government assistance.
  12. Stand up for Social Justice The Canadian Way from Canada writes: Mark Tilley from Brampton, Canada writes: So people without any ID can't get bank service but they can get gov't assistance?? How do we know they're entitled? Can't their worker help them get proper ID?

    You have nio idea as what these social assistance workers are?? There is no social work in ideology in the current social assistance program, only that of the Anderson Consulting firm ideology that the Harris government bought!!!!! Those who brought the downfall of Enron.
  13. Bill McDonald from Canada writes: Once again, the peanut gallery shoots off opinions without any sembelence of thought. Here's some factors to consider: 1) Payday loan companies loan to people with generally POOR or NO credit. Likely, these people have had problems in paying off loans in the past. It is safe to assume that the default rate is astronimical. If a customer defaults...who pays? It is highly likely that a good portion of the fees go towards paying off the loans of customers that default. If the rates are capped at 20%....who's going to step up to the plate and pay for the defaults? The taxpayer?. 2) Let's assume a cap of 35% was imposed. Let's say the average loan is $500 for one week. That would be $3.36 in interest. Let's say the average loan takes 30 minutes to administer, including repayment. Let's say the average wage is $15/hour. The owner would be losing $8.00 per hour per employee, assuming they were busy 100% of the time, not to mention overhead cost. 3)Ever try to take out a loan at your local bank for only $500? They won't do the business, because it doesn't make sense. Too much administration for too little potential profit. Where does the guy in a bind go for cash then? If these proposals are put in place, he's SOL. I have never used a Payday loan company, and I am not in the industry, however, if I mull over the issue for a minute or two, it's easy to see both sides. Just like we allow stupid people to smoke or overeat or drink to eccess and harm their bodies if they so choose, who are we to deny the budgeting impaired use of payroll loan companies?

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