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Pimpin on a Whole New Level |
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They are everywhere. On every corner, of most every urban city in America. The epitome of exploitation, the definition of predatory…. Taking hard earned dollars out of yours or someone you knows pocket, time and time again…. We are talking about the Payday Loan shop. It’s time people knew the real deal about these operations and Molifeney is here to lay it all on the table so that next time YOU WILL KNOW.
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Most people are familiar with Pay Day Loan shops, sometimes called Cash Advance shops so we won’t go into great detail about their history or the process. Essentially, these outfits offer short term(2-4 weeks) loans for people that are coming up short on money. The user of the loan usually has to show proof of income with a pay stub and will sometimes give the outfit a post-dated check for the amount of the loan plus the interest charge and additional fees. Some places even require that you sign over electronic access your bank account. When it is time to pay up, the Pay Day outfit will either deposit the check or the consumer may “flip the loan” which means they pay off the original finance charge and then immediately take an additional loan. At this point it is a destructive cycle, leaving you broke and the pimp, er Pay Day loan outfit rich. Two week loans have APR’s that range from 390 to 780%! Here are some stats courtesy of Wikipedia:
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The Payday loan industry has an annual loan Volume of more than $28 billion a year. It is a fast growing industry. Estimates from the year 2000 put loan Volume at between $8 and $14 billion, indicating that the market has more than doubled in size in 6 years.
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91 percent of their Revenue from borrowers who cannot pay off their loans when due, rather than from one-time users dealing with short-term financial emergencies.
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Only one percent of payday loans go to borrowers who take out one loan per year and walk away free and clear after paying it off.
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The typical payday borrower pays back $793 for a $325 loan.
For more information, check out www.paydayloaninfo.org To file a complaint contact the FTC at 1-877-382-4357 or visit www.ftc.gov
At Molifeney we are committed to helping end predatory lending. Please contact the Missouri senator Yvonne Wilson to get legislation passed regulating the Pay Day Loan industry.
4609 Paseo, Suite 102
Kansas City, Missouri 64110
(816) 924-5467
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