It’s not a big news story title loan company is sketchy as hell. That fact is well established. Remember back in 2016 when the Consumer Financial Protection Bureau fined money TitleMax’s parent company TMX Finance $9 million his fraudulent practices violated federal law? The CFPB also took down TMX Finance a permission in an effort to ensure that the law is actually being followed. But that doesn’t mean TitleMax has completely cleaned up its act.
ProPublica, together with Now, recently publish an interesting article targeting three TitleMax store managers who work for the company and punishing them for trying to explain more to customers about on what is needed to repay their loans. Because even though the CFPB is keeping a close eye on TitleMax, they say the company hasn’t changed the sales practices that got it into trouble in the first place.
For example, Ted Welsh Lupica said that he tries to convince customers that the minimum monthly payment is only enough to pay the high interest rate, and that they need to pay extra each month or if they want to pay down the principal. .
“I’ll let you know. I tell them, ‘Look, you make $2,000 a month and you want a loan of $2,000.’ I tell them, ‘Even if you pay us $200 a month, you’ll be doing that for the rest of your life because it won’t pay off the loan,'” Welsh Lupica said. . ProPublica. But his supervisor told him to stop. And after being reprimanded twice for being too transparent with customers, he quit.
Part of the confusion for consumers is related to how the loans are structured. The published interest rates of 9.9% and 12.9% are not low, but it seems that one can be forced to choose between a loan and not being able to pay for drugs. Unless the contract they sign is for a 30-day loan. If they can’t pay it back in full by then, the remaining balance will roll over to a new 30-day loan. Due date ProPublica look at what interest borrowers are paying each year, it added up to between 119 and 179 percent.
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When Cordelius Brown, another owner, noticed that many of his customers were struggling to escape the TitleMax debt trap, he tried to help. It was reported that he advised four people who owed about $10,000 to take out a low-interest foreign loan so that they would actually have the opportunity to pay. When they did exactly that, county manager Brown was furious with him for losing such important news.
“Our customers are good, hardworking people. They’re not stupid people,” Brown said The Present Time and ProPublica. “As for TitleMax, they have one goal: money.”
Of course, any time a story like this is written, idiots like to crawl out of the woodwork to say things like, “If someone is dumb take a one of these loans, they should have.” Like everyone is born with an 800 credit score and knows what savings is. But the picture painted by this article is not one of consumers not reading what is in front of them. This is one where TitleMax works hard to make its contracts as confusing as possible and punish employees who dare to actually explain to customers what they’re getting into. It seems very bad.
It’s a long story, but you have to be sure read the rest here.