Fresno War Hero Falls Victim to Payday Loan Business Charges 460% APR!

Jason Comely at Flickr

A couple of weeks ago, I heard the saddest story from a 80+ year-old war hero.  He told me that he had survived many attacks from enemy fire, but he fell victim to our local payday loan industry.    

Retired and recently widowed, this war hero was forced to take out a payday loan to help his children's family out.  (Most of his retirement is spent on family.)  Unfortunately, he was not able to repay the loan on time and has losing a battle to late fees and interest rates that are eating away his monthly retirement fund.  He spends nights wondering how he is going to be able to dig himself out this hole.  

Bankruptcy may be a last resort.  

Payday loans advertise themselves are being saviors to community as they can be a short term fix until the next payday; however, I think they are more a cancer on our local economy.  In fact, I think these businesses pray upon the lower economic citizens in the Central Valley.
Fresno's "Check Into Cash" Charges APR of 460%.
I went online to check out a few Payday Loan companies in Fresno.  I was shocked!  Fresno's "Check Into Cash" payday loan store charges their customers an interest rate of 460%, per year.  They proudly advertise it.  Here is an image from their website: 

The sad fact is that this not uncommon in the industry.  Client borrows $255, and then repays $300 14 days later.  That is 460%.  

You might be thinking that I am making a big deal over $45.  However, as a bankruptcy attorney, I have listened to the story dozens of times:  Client goes and gets $255.  Repays $300.  Has to go back again.  Then again.  Sooner or later another "emergency" happens and there is no $300 to repay.  The client then goes to a different check cashing store to get $255 to pay to the first store.  Soon, the client is juggling multiple stores.  No wonder that filing a Chapter 7 Bankruptcy becomes the only way out.     But this is not how they advertise it   Fresno 

Cash Advances Promises They "Might" be the Answer to Financial Woes:

Cash advances or payday advances, are ideal for anyone who is in an emergency situation and needs money now. Whether you need cash to pay a utility bill, the landlord, get your car repaired, or any other unexpected expense, payday loans might be the answer and Check Into Cash is right around the corner. We have a Fresno payday loan center in Midtown Plaza ready to help you get your money today.

How does this happen?  Why does it happen so often?  Certainly it is not because of a lack of businesses that offer the service.  I went onto a search engine and typed "payday loans Fresno".  There were pages of advertisement.  I looked at a map of Fresno, and the map had more than 70 businesses listed as payday loan centers.  70!  Shaw Avenue is by the far the epicenter of check cashing stores.  North of Alluvial Avenue had some payday loan businesses, but they were few in number.  There were a good number of businesses located south of Shaw Avenue, but I was surprised that Shaw Avenue had the densest supply of businesses.  

It is Easy To Get a Payday Loan!
Nor is it difficult to get money.  I investigated a little further by researching a company online, Fresno Check Into Cash Fresno Payday Loans.  Here is how they describe how you can get a loan:  

You just have to write a check and leave it with the store.  This seems too simple.  I would imagine that you would have to show a driver's license and some pay stubs to show that you are gainfully employed.  But, even if they required the additional amount, the process is still easy.

The funny thing is that if people were able to save $255 and put it into a savings account themselves, they would not be abused by such high fees.  Its a shame that Fresno seems to have a city full of people who cannot save a little a  money, but are able to keep 70+ businesses flush with cash.

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases in California.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at [email protected] or by telephone at 1-559-324-1882.