Marketplace Sucks

[Aria]

Sometimes, I love this TV show... but other times...

Marketplace is a show that goes into various ways consumers are getting ripped off. I liked the one about how appliances are crap. I liked the one about orange juice, although I already knew all the stuff they went on about. (I read Squeezed, I think it was) This last episode, though, made me groan and want to tell them STOP DEFENDING THE STUPID PEOPLE!

It was all about this loan company that gives out loans to people the bank won't help. Right there is a red flag. Canadian banks are pretty damned conservative but if they won't help you, there's often a good reason. So this place gives out loans and when their undercover operative asks what the interest rate is, it's 47%! Then they have an actuary analyze it and he says the rate is actually more like 58%. The criminal interest rate in Canada is 60% or up.

Okay, so it's not cool that they're misrepresenting the interest rates. But 47% is REALLY BAD! Credit card debt is never over 30! This is the kind of loan you get if no one else will lend to you. I'm supposed to be outraged over this?

People, just stop being so goddamned stupid. Don't torch your credit history then whine about the interest rates you have to pay. Augh!

[Rosco the Iroc]

Payday loans are like that. I've seen worse. I was a financial counselor when I was in the Navy. Thankfully various lawsuits have mostly stopped these people-

[Golden Phoenix]

Wow, I've seen some payday loans (Usually a couple of hundred pounds) with apr's over 1000% and no, that is not a typo.

From wikipedia's "Payday loans in the UK" page: there are no restrictions on the interest rates payday loan companies can charge: one UK payday lender charges a "typical APR" of 1,355%,[7] another lender advertises an APR of 2,225%

[EricKei]

John Oliver has a piece on it, too.

Dude's getting into XKCD/Simpsons territory ~_~ Give him a few more years, and there won't be much he hasn't commented on in his shows.

[April]

I've received payday loans before, when I had to make a mortgage payment and just couldn't any other way. Honestly, people need to do their homework. I knew what I was in for. I also knew that if I paid it off in a certain time, I could get away with only paying 20 or 30 bucks in interest fees. That's why, when I got a 200 dollar loan, I paid 100 the next pay day, and 100 the pay day after that. I paid 30 bucks overall in fees.

[wolfie]

Payday loans are like that. I've seen worse. I was a financial counselor when I was in the Navy. Thankfully various lawsuits have mostly stopped these people

Note that they brag about being 100% native owned and operating from a reservation. There's a reason for this - it's an attempt to get around state consumer protection laws, since a reservation is technically not part of the state within which it is located.

[taxguykarl]

I've received payday loans before...Honestly, people need to do their homework. I knew what I was in for. I also knew that if I paid it off in a certain time, I could get away with only paying 20 or 30 bucks in interest fees.

I did that sort of thing for a car repair. I paid that off the same week (it was my next payday) and washed my hands of them.
Yes do your homework if you are considering one of those.

[Jetfire]

For the most part, I love Marketplace. They're shows are usually pretty good and spot on.

Of course, there have been a few that I've looked askew at or just facepalmed about; but overall they do a good job.

A year or so ago, mom was seriously considering getting into Herbal Magic. I showed her the Marketplace episode about them, and she dropped that idea like a hot potato. (The local store has finally closed thank goodness)

[El Pollo Guerrera]

The thing is, people are desperate to get their money fast and don't bother reading the fine print. My sister (who lives in a large city far away) got caught up with one of these loan companies and another sister had to sit her down and show her in the paperwork the small print that showed the rate and how much that turned out to be (sorry, I forget the amounts). It took a long time for her to get out from under that debt.

Another one is those 'rent-to-own' companies... I actually got to look at one of their contacts one day. Someone I know was sending in the final paperwork on a 'rent-to-own' contract for a computer and he asked me to look at it (I know a little about computers... very little but slightly more than he did). He would end up paying around $2500 for a laptop that he could get at a local store for around $500. And I told him that. He went to that store and bought that laptop the next day, and it sure took him a lot less time to pay it off.

I did notice one other thing in the contract that bugged me... none of the dollar amounts had dollar signs in front of them.

[EricKei]

EPG - Yep. Psychological trick. Some restaurants do this, and not just the ones where "If you have to ask, you can't afford it." AFAIK, it's been tested and *proven* that people generally are more willing to pay the prices in those cases because there is just slightly less of a subconscious connection between the amount and "money" (kinda like how people seem to spend more when using credit cards than when using cash).

[catcul]

It's the same as so called "free-to-play" games. They use in-game currency to mask how much real world currency you're spending. They have been called "pay-to-win" and "cow clickers."

Cracked.com has an article about someone who spent $9,000 on "Game of War." If you ever wonder how "free-to-play" companies can afford to have commercials with expensive production values and celebrity endorsements like Kate Upton, keep that in mind.

[EricKei]

Aye. Manny also use "Skinner Box" techniques to get/keep people interested. Hell, they have this most wonderfully unfortunate name for that tiny percentage of players who spend 90+% of the money on any given game: "Whales." This is why games like Candy Crush and Fallout: Shelter have historically brought in more than a million bucks per day in gross revenue.

[Teysa]

A million bucks per day? Sheesh, I'm in the wrong line of work.

[Aria]

Wow, and I thought I was a big spender when I dropped maybe 50 bucks on Farmville...