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Listed below are stories about real victims of payday lenders. Their stories are both compelling and sad, but more than anything, illustrate the debt trap caused by payday lenders.
Bob's Story
Hi, my name is Bob and I live in Center Ridge, Arkansas. I can vividly remember this true to life nightmare. There had been a death in the family and I was having trouble just paying the utilities. I saw a payday lending office and decided why not? I figured that if I could “catch up” the bills, then I could afford to pay off the payday loan about $10 dollars a month until it was paid.
I went in and needed to provide documents from my bank and my source of income. They required that you have no insufficient funds on your statement. So I got my first payday loan. As I signed the lengthy form, the clerk reminded me that I had to pay the full amount in 2 weeks. It was 3 more weeks to payday, and naively I agreed to this because I thought I could be resourceful with my money and make up the difference.
This was not the case. I pawned most of my belongings to make the difference and when I fell short, I had sought another payday lending company just to pay the first one off. So now I was in debt to two payday lending companies. I had a little money left after paying the bills, so I thought that things would settle down. Payday came around and now I was faced with two more large debts plus my regular monthly expenses.
Thus I became enslaved by these merciless businesses. This continued for many years until I was spending most of the month dealing with over 12 payday lending companies. One would go to pay the other. Some of the debts were big amounts, others were less. I traveled from Knoxville to Russellville to Morrilton to Conway to Batesville to Clinton to Hot Springs to Heber Springs to Searcy every month for years, along with the same group of customers I would see at these stores who were caught in this same debt cycle as I was every month. I finally asked my sister to loan me $3,200.00 to pay these people off.
Now I have my dignity back, but this nightmare continues for many others. The moral of this story is to WARN YOUNG AND OLD ALIKE…do not patronize these businesses, you will be physically, mentally, spiritually challenged and defeated by these businesses.
BEWARE…remember the story about Adam and Eve and the snake (check cashers)…
Brandi's Story
My name is Brandi and I live in Pine Bluff, Arkansas. My family was going through a transition and fell into a financial bind. My husband and I decided to get a payday loan in the amount of $300.
We didn’t want to carry out the payments of $68.00 they set for us because we would’ve repaid a little over $800 for a $300 loan, so my husband made bi-weekly payments in the amount $100 directly [in store] to the company. A balance of $180 was paid in full on the 6th week of payments.
The company started saying that we still owed money to them (another $300) as if they hadn’t received any payment(s) from us even though receipts of such had been provided. They started making attempts to draft the money out of our account until an attorney became involved.
I wouldn’t recommend pay day lending to anyone because it is indeed a trap. The interest rates are outrageous. Even for those of us who got the loan, repaid the money as scheduled… it’s still a trap because the company will only swear they never received funds in an attempt to continue draining your families finances for as long as they want!
I would recommend trying any other method of loans aside from payday lending because it can become a never ending process of trickery and deceit.
Charles' Story
My name is Charles and I live in Jonesboro, Arkansas. I would like to have my money back, if possible, that I spent with the payday lender Cash Today in Jonesboro.
I have been caught up in the trap of payday lending and when Cash Today got in trouble they did not tell me that they were getting in trouble they just took my money and I got nothing in return at all. Today when I paid them back and tried to re-borrow like I have been doing for the past 4 years I was told NO that they were no longer going to make payday loans.
I have other bills that are due it was stupid to get involved with them in the first place. I knew that from when it began, but that was four years ago. I did get out from underneath these payday loans for a bit, but went right back. It didn't make any sense…they are robbing people and I knew something was up cuz no matter what the state will try to do to them they will change in order to get money from folks like me.
When I left the today day I gave the woman $400 dollars and she would have gave me $350 dollars, but today it didn't happen that way. We argued and then she said if I can wait they would be back in operating in two weeks as a pawn shop. Cash Today said this!
She didn't tell me that they were in trouble but I had been following this through the newspapers and I do not want my name shown to the public. I just think they should repay everybody since they got so much money from us over the years.
Cindy's Story
My name is Cindy, I live in Memphis, Tennessee and I would like to share my story with the high hope that it will give insight, advice and alleviate the crippling fears that victims of the Internet Based Payday Loan trap face day and night.
My unfortunate odyssey began 4 years ago when I started to get behind on the basics such as rent, utilities, phone, etc... I didn't have any credit card debts because I didn't have any credit cards. I'm middle aged, single and work straight commission in Sales for a good company. I was astounded how easy it was to obtain a payday loan online and took out my first. Although it was instant money deposited in my account, the bi-weekly fees started coming out and I was depleted once more.
So, needless to say I continued to take out loan after loan thinking I was going to hit pay dirt at work and pay them all off. It never happened and after 1 1/2 years of unmitigated hell I decided to swallow my pride, go to my family for help and they were supportive. I had over 10 payday loans at this stage that I had been paying on for over 1 1/2 years....most all under $ 300.00.
I filed for bankruptcy and my debts were wiped clean and I felt I had a new beginning. I was initially harassed by the loan sharks but once I told them to contact my attorney, they didn't have a leg to stand on and ceased harassing me. My bank account was closed and I reopened another one.
Time went on and I was somewhat secure for awhile until the economy started to take a turn for the worse and I wasn't making quota at work which meant I was barely able to support myself and had very limited resources. My Father had passed away in February 2007 and I was suffering from depression, grief and extreme anxiety. I once again took out a payday loan thinking my days ahead would be brighter and financially better.
This time it was 5 companies in a matter of a few months. I was counting on my yearly bonus at work to pay them off in January. I was $500.00 short of making my bonus. I was also desperate and one afternoon I found a Volunteer Advocate in Arkansas that not only was a God send but a man who gave me advice, support and encouragement.
I was very embarrassed and ashamed to admit how foolish I had been not only once but twice and he led me to a group of people on a website, www.ourcommunitypower.org that truly helped me regain my confidence and courage to deal with these unscrupulous loan sharks. I was amazed how many other people like me have fallen into this trap and so many are not aware that there is help out there to combat these predators, protect yourself and sanity while regaining your self worth and financial security. I believe one of the greatest fears victims have in common is that these predators will prosecute you, garnish your wages, and wreck your lives if you don't comply with their demands.
Please remember these parasites are illegal companies that do not have a license in your state and do not have a leg to stand on. There are many options to cutting all ties with them and regaining your freedom. Closing your bank account is the first step, contacting your Attorney General's office to inform and report them, writing Cease & Desist letters to the companies by certified mail and refusing any verbal communication. The site I mentioned above will give you a wealth of information and examples of letters and necessary resources to aid in accomplishing your mission and goal to freedom and a peace of mind.
My last piece of advice is to not beat yourself up about the past but use your experience as a chance to reach out and witness to others in the hope that they too will do the same. Once we all unite and band together the sooner these predators will be put out of business and in some cases incarcerated for illegal, unethical business practices. God Bless!
Eric's Story
My name is Eric and I live in Conway, Arkansas. Our family had a financial emergency. We were in need of money fast, so my wife got a payday loan over the internet for $300.
After we received it, 2 weeks later the first payment was withdrawn automatically from our checking account. Within two and a half months the loan was repaid plus interest, but the payday loan company continued to withdraw money from our checking account.
They wouldn’t stop taking payments on their end even after I asked them to stop. So I had to do a stop payment at my bank. However even after I did the stop payment, they withdrew money from my checking account by making the amount they were withdrawing 2 cents less than the stop payment amount which was a red flag there.
So on a $300 loan; we have over paid nearly $250 in interest. What a rip-off!
Glenda's Story
My name is Glenda. I live in North Little Rock, and I am a victim of payday lending. Abusive payday lenders trapped me in a cycle of debt and harassed me when I was unable to pay. If this happened to me, this could happen to you, your family member or someone you know. So, I would like to share my story.
My husband had to retire on disability from his job because of an injury. His salary was cut by more than half. We still had the same bills so I borrowed $500 from a payday lender to help make ends meet. Instead of solving my problem, it was the beginning of a nightmare. I only received $462.00 because $83.16 was for interest on the loan to be paid back in two weeks. When I was unable to pay this back on time, I had to go to another payday lender to get a loan to pay the first payday lender back and this in turn starts the cycle of debt.
When it became impossible to make timely payments, harassment and scare tactics began. Payday lenders call you at your job, call and send letters to your home, or call your boss and put your job at risk. The payday lender issued a credit card to me without my knowledge or consent. The only way I found this out was my husband and I refinanced our home and discovered the past due credit card account on my credit report.
Some payday lenders use very abusive collection methods. Borrowers usually give the payday lender a check as security for the loan. Payday lenders can then threaten to turn your check over for collection. They attempted to cash mine three or four times causing $30 bank overdraft charges each time on top of the $25.00 the payday lender charged me for an insufficient check.
My experience with payday lenders had me feeling afraid and humiliated. I personally cannot have my name on our checking account or bank cards because of being afraid they will continue trying to run these checks through. My husband has to handle all the bills and business.
The 1999 Check Cashiers Act protects some payday lenders who charge “fees” which amount to more interest than the Arkansas Constitution allows (17%). I would like lawmakers to protect vulnerable consumers like me by enforcing the state Constitution’s limit of 17 percent.
Glenn's Story
Hello, my name is Glenn. I live in Colorado and saw the information on your web site about Alternatives to Payday Loans and your section to help victims. The information was very helpful, I just wish I had seen it before I got into this trap called ‘payday lending.’
I'm in debt to 12 payday loan establishments. One is over the internet and 11 are stores here in Colorado. I paid the rollover fees until I was no longer able to do so. I closed my bank account so that each check would not bounce. I am now being accused of writing checks on a closed account.
I'm on Social Security disability, and have no way of even making payment plans. I'm extremely terrified because I know that I won't survive in prison. My only option is to be homeless while I pay one loan at a time in full for the next 12 months. I'm not a criminal, and never intended to defraud these establishments.
I got myself into this mess, and have no idea what to do. Thank you so much for listening.
(Editor’s note – we referred Glenn to the Colorado Attorney General’s office.)
Hatties's Story
My name is Hattie, and I am a victim and survivor of abusive payday lending practices. I am a resident of Little Rock, but I am from Arkadelphia. For many years, I was an employee of UAMS.
My encounter with payday lending occurred in 1999. It was then that my husband had just died after a prolonged illness and my daughter was suffering a serious medical problem. As a result of these circumstances, I found myself facing about $95, 000.00 in unpaid medical bills. I had to file a bankruptcy petition. In addition to the huge medical debt, I found myself needing $750.00 to repair my automobile.
Before this time, I had been qualified to borrow up to $3,000.00 from my credit union on nothing more than my signature. I could not do that this time, though, because of the large unpaid indebtedness. I needed my automobile every day, in order to take my grandchildren to and from school everyday and run errands for the family. Because I was unable to get the money to repair the car from any other
source, I decided to turn to a payday lending company.
I borrowed $500.00 from the payday lender and added that amount to the $250.00 that I had on hand and paid to have my car repaired. As a part of the loan transaction, I left with the payday lender a check for $575.00, $500.00 of which was for repayment of the loan principal and the additional amount for what I understood to be the interest on the loan.
That's when I became caught in the quagmire. I did not have the money in the bank when the first pay period ended, so I had to roll the loan over. As I understood things, to refinance the loan it cost me a $65.00 charge in addition to another $75.00 interest for the next payroll period. That was an additional $140.00 to the $575.00 that I initially owed.
That was also an additional $140.00 from my already-tight household budget for my daughter, my grandchildren, and myself. At the end of the second payroll period, I was again unable to pay the full amount of the loan. So I had to refinance the loan another time for another $140.00. So I was even deeper into the debt-trap.
The bottom line is that –as time went by - I basically became indebted to the payday lender to the tune of an extra $280.00 each month based on a single loan of $500.00. I had no chance of reducing the debt, because the only options that I had with the payday lender were to pay the full amount of the indebtedness or to refinance the loan over and over again.
The situation was a downright nightmare. I was both stressed and depressed as I tried desperately to find a way out of the situation. I could not allow the payday lender to send that check that I had given to the lender to my bank, because I did not have sufficient funds to cover it.
I was in this trap from about mid-June, 1999, until mid-February, 2000. I was very fortunate that my tax refund that year was large enough to allow me finally to pay the payday lender all of the built-up debt. The life of the loan was about 8 months, and I figure that I paid $2,240.00 in interest and fees on a $500.00 loan. I figure that my total payment was about $2, 740.00.
I don't want anyone else to suffer what I did with payday lending. I know that sometimes in life people need to be able to borrow a relatively small amount of money from some source whenever they find themselves in financial trouble despite being as responsible as they can be. But I also know that the astronomical interest and fees charged on payday loan, and the refinance rat-race that comes with them, are definitely not the answer.
Hazel's Story
My name is Hazel and I am presently a resident of North Little Rock. At the time I got involved with Payday Lenders, I lived in Jacksonville. I am telling my story to help educate other citizens as to the debt trap you can find yourself in after getting a payday loan. I also want to help others better understand just what happens with these lenders. Hopefully others won’t fall prey to their lending practices.
I had been temporarily laid off my part-time job which was to pay the expenses for two major events I needed to attend. One was a family reunion of an entire new family I did not know and that I had and had never met. The other was my 40th year high school class reunion of which I had earned the title of “Queen.”
I needed approximately $500.00 to attend both events (registration fees, transportation, lodging, etc.). I had been told I would be going back to work the first of the month so I thought once I went back to work, I could repay the loan. I was eligible to borrow $300.00 from First American Cash Advance in Jacksonville. The check was written for $300.00, but I actually received less. I think it was about $260.00 that I actually received.
When I didn’t get back to work as scheduled, I was unable to repay to loan on time. They began harassing me by phone with very intimidating threats about putting me in jail. They began terrorizing me by visits to my home and my neighbor; calls were made to my 84-year old mother and my brother. I’d never had anyone to try to collect a debt in that manner before.
My social security was direct deposited and they would go to my bank as soon as it opened, which was long before the close of business deadline for me to pay my loan. They should have allowed me to present my check for payment. Because they took money from my checking account at the bank that caused my rent and living expenses to run short.
This caused me to have to run and get another payday loan from another store for payment causing my rent and living expenses to run short. Which, in turn, caused me to have to run and get another loan someplace else in order to pay my living expenses? I didn’t get back to work when I expected so I was in this vicious cycle of trying to pay them and then remake the loan in order to keep my expenses paid.
I was stressed beyond my limit. I could not reason with them so that’s when I contact Mr. Todd Turner, a consumer protection attorney for advice and assistance. I discontinued my direct deposit, and changed my phone number. They would then re-deposit the check over and over again causing astronomical bank fees. They later began sending out credit card applications urging me to accept the card so they could charge the check amount to the credit card.
I was terrified. I began spending the night with friends whenever I got a call from them because I didn’t know what they were going to do. It was very humiliating and degrading. I hope my children and grandchild never get mixed up with these people.
I pray that our lawmakers will change the Check Cashers Act that allows payday lenders to charge more interest for loans than the Constitution allows (17%) and keep these predators from preying on the citizens of Arkansas with their unfair practices.
Katie's Story
My name is Katie and I live in Monticello, Arkansas. I am currently in the process of breaking free from the payday loan cycle. I have been using payday lenders for approximately 10 years. When it first started, it was to take care of an immediate emergency, but over time, these loans became like another paycheck that I had to have to pay my bills, but because of the fees I then had nothing left over.
Over the years I have used income tax returns, work bonuses, and any extra money available to pay all the loans off. I have even taken out personal loans three times, to pay off all the smaller loans. Every time, I promised myself I would never return. It is so demeaning, and you feel stupid for not being able to have a better hold on your finances.
I have been unable at times, to buy groceries, buy gas, take my children to birthday parties, not participate in church functions, put my own children's birthday celebrations on hold, etc., just because I had over-committed myself financially to these payday lenders. I would feel empowered when they were paid off, and defeated when I owed every payday lender in my area.
It starts small, because you have an emergency. I am a single parent, so when an emergency came up, there was not any other source to help. I would turn to these services, and before you know it, you are taking out a second loan to pay off the first loan. Another loan to pay off the two, another to pay off three, and so on. Then, you're stuck. I had a friend that was in this cycle with me for years, and we would call these places by loan shark names, because we had to laugh rather than cry when we were drowning.
When I sought help this time, I owed over $3000 in loans, and did not feel I could hold out one more month. Then, like so many others, I walked into the first one I normally go to, and they warned me if I paid off that loan they wouldn't be able to renew my loan, because of a so called "hold" the attorney general's office was putting on the industry. I found out immediately that it was due to a mandate that the Attorney General's office had sent out earlier this year. If this particular center would not have given me a heads up, then I would be in financial meltdown right now, I know.
This event was my open door, so I went through, and have no intention of going back, and those doors are being closed behind me, so it's making it that much easier. I feel a ton of bricks has been lifted from my shoulders, I am on a budget, and I have an advocate, attorney, and friends that are willing to go through this with me. I cannot tell you what Arkansans Against Abusive Payday Lending has done for me, they threw me a life-preserver, when I felt I was drowning, and saw no way out.
My story is long, and has gone on for years. It is not over, because I am going through the process of waiting to see how all the recommendations from the agencies involved play out, but I don't feel alone and defeated any longer. There is a way out, and there are people who can help. The sooner you break free, the better.
Tim's Story
My name is Tim and we live in Little Rock. We were running behind with a few bills and my parents who are on a fixed income needed some financial help. I really didn't know where or who to turn to for help so I applied and received a $300 payday loan over the internet. My intention was to pay it off on my next payday but instead only the fee of $90 was drafted from my account. By the middle of September I had paid them back $450 in fees alone.
Our finances were getting very tight as we had accumulated numerous medical bills. So I contacted the lender to see if an arrangement could be made to either reduce the amount I owed or even declare the loan paid in full since I had already paid them back more than I had borrowed. But they refused to work out any kind of an arrangement with me. I had enough by then and I was not going to allow them to have access to my checking account. So I closed my bank account and opened a new one. This was very hard to do because we have had that account for almost 20 years, but it was the only thing I could do to prevent them from taking more of our money.
Shortly after I closed my account, I filed a complaint with the Arkansas Attorney General's Office. They were very helpful and encouraging. They attempted to contact this lender and as of today the lender has not responded to the AG's inquiry. I also did some research on this "lender" and found out that they are a part of a much bigger operation. I believe that they are headquartered in the Bahamas. They did have a mailing address somewhere in Utah but after tracking that down and speaking with a banking official in Utah, I learned that it was just a mail box for receiving mail and that they were not licensed in the state of Utah, let alone the state of Arkansas.
Now after a few months have passed, I've started receiving e-mails from them offering me a one-time settlement of 70% of the balance they say I owe of $495 and that they are there to "help" me. But for a one time offer, I seem to receive that e-mail about two to three times a week. It's almost comical. But now I'm starting to receive phone calls at work. I do have caller ID so I don't answer any number I don't recognize, so I just let it roll over to my voice mail. That was okay for the first time, but now they are calling our receptionist to get through to me.
On two occasions I notified them that I was not to be contacted by either e-mail or phone at my place of business and each time they have ignored my warning. I told them in my last e-mail that they would not receive another payment from me. Then just this morning I received another e-mail from them at work (after I told them not to contact me). This time they were offering me a payoff of two payments of $170 due on 12-1 and 12-15 and the only payment method is Visa or MasterCard debit/credit card. These people must think I'm stupid to give them that information let alone pay them a total of $340 on a $300 loan of which I have already paid them $450!
According to the Attorney General's office, the loan is illegal and in violation of Arkansas law. They also told me that it is highly unlikely that they will attempt any kind of legal action against me. These "businesses" are sharks that prey on people in their times of need and need to be shut down. I never should have tried to get a payday loan especially one over the internet in the first place. I encourage everyone who reads this to never under ANY circumstance take out a loan from any Payday lender, especially one over the internet.