Confessions of a Former Payday Loan Employee
This is a guest post from someone who wishes to remain annonymous. I think you’ll understand why when you read it.
There is a reason that payday loan places have you fill out those nice little forms with all kinds of contact information and references. Go late on your loan, and you’ll wish you didn’t.
They will call you EVERY DAY. They will call your references EVERY DAY. They will call your place of work EVERY DAY. The only way to get them to stop calling your job and/or your references is to CONTACT THEM IN WRITING, CERTIFIED, RETURN RECEIPT REQUESTED and tell them to quit calling anywhere except your home.
They will border on giving out your information to other people. In this day and age of caller ID, anyone you use as a reference will know your personal business. By LAW in (state edited), if a caller asks what company you represent, YOU HAVE to tell them. So you can say, “I’ve been trying to reach Joe Smith and have been unable to contact them. It’s VERY IMPORTANT that you have them contact Sally Sue” and give a number. If they ask where you are calling from, we were required to say “XYZ123 Company”. I had several people ask me if Joe went late on his loan. I told them that I legally could not discuss that information with them. Guess what? Doesn’t take a rocket scientist to figure out that if Joe wasn’t late on his loan that I wouldn’t be calling you!
Many places offer their employees a ridiculously low base pay with BONUS. Guess what the bonus is tied into? You guessed it! How many accounts we had delinquent! So think COLLECTION AGENCY when dealing with them! I saw managers that would make HUNDREDS of dollars a WEEK in bonuses ALONE! (Which is why they will get so nasty if you do not pay on time!)
We had to call the banks EVERY DAY. When the funds were there, we would either deposit the check or ACH the account. Joe’s mortgage payment would bounce, his utility payments would bounce. No VERBAL agreement preserves your rights. Read your contracts. Goodbye paychecks. Goodbye tax returns. If you had a joint account and your spouse got paid, kiss that money GOODBYE, too. Many banks would CASH the checks for us…take Joe’s check, cash it out of his account, and convert it into an official check made payable to the company! Don’t forget: Banks get FEE income from official checks and NSFs! I’ve seen companies redeposit checks several times just to spite the customer for not paying off the loans.
We were TRAINED COLLECTORS. We were trained to get you to pay your debt. PERIOD. If you cried, we didn’t care. We would tell you that we cared, but we didn’t. We would remind you that when you paid your debt that you could “readvance…and well, how many of your bill collectors will let you have the money back after you paid them? Would your utilities? Your landlord? The finance company for your car…or would they just laugh in your face?” We could shoot down just about any and all excuses. Lose your job? “Borrow the money from a family member and we can readvance.” You pay the loan back and then attempt to readvance, “Sorry, Joe. We cannot advance a loan without income. We cannot advance you until you have a new job and then you’ll need to come in with a new paycheck from them. We’ll see at that time what you qualify for.” We were trained collectors AND LIARS. We’d tell you ANYTHING to get you to repay a loan!
Payday advance companies typically judge what you can take out based on 50-65% of your net pay. Does Dave (Ramsey) recommend that you take out ANYTHING, including a HOUSE on 50-65% of your pay? NOPE. Repeat customers keep payday advance companies in business. The easiest way to keep repeat business is to keep you ENTRENCHED in loans. Some companies will see your net income, subtract out the loans you have with others (we had software to find that out), and figure your loan based on the difference. Others will not. They will see that you bring home $1800 a pay period * 50%= $900. You have a loan out with a competitor? If they didn’t subtract out that loan, do you see where you are out WAY MORE than 50% of what you net? So if you owe Competition Loan $500 and I advance you $500, you now owe MORE than what you make. You are now juggling one loan to pay the other. Some states have a limit on how many loans you can have out at one time. Most don’t. Most people get around this by doing internet loans. If you live in AZ, you can only have one loan out there. So you go down the street and take out a loan. Then you go online and get a loan from CO. You TECHNICALLY don’t have two loans out in AZ. You have one out in each state.
Back to what you list on an application:
a. I showed up at folks’ doorsteps to ask when they would pay the loan.
b. I showed up on folks’ jobs to ask when they would pay the loan. I called parents, co-workers, friends, other family members. One guy wouldn’t pay his loan and dodged me. After knocking on his door (which he would not answer), I saw his neighbor, asked her to give him the message that “I haven’t been able to reach Tony and I am VERY worried about him. Have you seen him? Is he Okay?” “How do you know Tony?” “I’m a friend of the family.” I then proceeded to flier all the surrounding houses to his, INCLUDING his own. He came in and paid the loan the following day. I told another guy’s boss that I was interested in buying a car. I told him that “Joe the car salesman” had talked to me before and that I would prefer to conduct my “sale” with him. Joe came in and paid because he was afraid that I would give info to his boss.
c. The worst one I ever pulled (and I prayed and asked forgiveness for this one because it was the WORST Christian witness) was this:
Sam was late on his loan. Sam had been living with Mom and moved out. Sam had changed his cell phone number. I found out that Sam’s Mom was a Pastor of a church and the references that he had on his sheet were a few of his fellow church members….most specifically, church leadership. I did a reverse lookup and found Sam’s Mom’s listing and also asked his references, “Hey, what church do you go to?” I left messages for Sam’s mom at work and at home.
Sam’s mom called me. I told her that I LEGALLY could not get into the legalities of Sam’s business, but told her that Sam was giving a really BAD Christian witness. Not only had he listed 3 names of her parishioners as references, he was now dodging us. Also, I informed her that my manager was a non-Christian (which was true) and that he was giving a BAD WITNESS TO HER. She now saw Christians as “Bible thumpers who would preach the Bible to her when it was convenient to them, but bail on their loans when it was convenient for them. If Christians are like this, then I don’t NEED what they offer.”
Guess what? Sam’s Mom came in to PAY OFF his loan when she got her SOCIAL SECURITY CHECK. I closed Sam’s account.
We were never allowed to close accounts at the branch level. Only the corporate office could do that (and they would NEVER approve it, unless someone got violent with us). So I would just put 9s where their phone numbers belonged and put “MOVED, NO FORWARDING ADDRESS” in the address field on my screen. I would then tell them that their accounts had been closed due to too many delinquencies. Of course, I would do this after I got the $ and when I knew they would be back in to readvance the next day. No more $ from me!
Payday loan companies hate this time of year because people who are getting tax returns aren’t coming in for loans. They will mail you out all kind of teasers and promos to get you to take out more loans. DON’T DO IT! Cut your budget, pay off the loan with the tax return, and GET THEM OUT OF YOUR LIFE! Follow Dave’s plan PLEASE! They are counting on the fact that you will blow your tax return and be back in the same trap in a matter of weeks!
I finally grew a conscience. I couldn’t take any more. I could not stay a Christian and continue with this type of treatment of others. When I would see delinquent customers coming in, I would tell the manager that I was taking a break and go outside. I’d pull the customers off to the side and tell them, “If you can’t get out of this right now, start by advancing $50 less per pay period. Take the difference of what you were paying us in fees and start paying it into an emergency fund. Grab a job delivering pizzas, babysitting, whatever, and pay it into an emergency fund. Borrow less and less from us. Use the EF for actual emergencies. Once you are out of this, don’t get back into it.”
Most companies will not keep delinquent loans in house for more than 30 days. Let it go to collections. There they can make payment arrangements. Pay $30/month and get free of it.
If the payday loan company is a member of the CFSA, the CFSA standards say that you can split a payment, 1/2 and then 1/2. Most payday loan companies will tell you that they cannot do this. This is not at all true. Get a copy of CFSA standards. Companies that are members of CFSA will normally have an emblem posted somewhere. Again, get out of this!
Overseas internet payday advance companies do not function by the same rules. They will ACH your account daily and put you into overdraft to the tune of THOUSANDS of dollars if you do not pay them back.
You are playing with sharks and WILL get bit! So much for them “offering an emergency service” and caring for the customer!
All I could say when I first read this on a Dave Ramsey board was “Wow, people need to hear the inside story!” All names have been changed to generic ones to protect the innocent or guilty. And as someone who made the mistake of getting a payday loan years ago, I can vouch for a few of these collection tactics described. Anyone else?