Former Payday Employee Story
I was employed with a pay day loan company for about six months before I became completely disgusted with the entire industry. These companies feed on the people living on a paycheck-to-paycheck basis. Most companies charge fifteen dollars per one hundred borrowed. A five hundred dollar loan will cost you seventy five dollars whether it is for one week or a month.
I do not know how you received your information concerning the frequency of customer’s loans, but the numbers are way off. The customers who do come in and repay the loans take out another loan right then almost every time. So if a weekly paid customer received a five hundred dollar loan and reissued this loan every week, he would be paying three thousand nine hundred dollars over the course of fifty two weeks. Not to mention some customers have more than one loan with different companies, causing them to be over extended.
Their collection techniques are sneaky and somewhat under handed. The employees of these companies are to check the account every day on an overdue loan and if the money is there, you take the check to the bank and have the bank turn it over into a cashiers/certified check, essentially cashing the check; then deposit that check in the company's account. This takes a lot of customers off guard and creates another problem for them: overdrafts.
As a former employee of one of these companies I feel they are legal Loan Sharks and should be shut down. They do not help nor do they want to help any customers. They want to create a dependence on their services so the customer is forced to reissue the loan on every payday. I fully support any effort to run these companies out of our state.