Demographics is a major deciding factor to any start-up company or to those who are branching out to new locations. As with any industry, money lenders can be found quite easily in certain areas of town. Who is the judge as to where a good or bad place can be? Labeling businesses as predatory lenders for using demographics to target customers seems to be quite unbalanced since the practice of it is used throughout all industries. I guess it all falls into the laps of each individual and their particular situation, and how many customers were negatively affected by it.
There have been many harsh complaints towards the payday loan and cash advance businesses for targeting certain markets for their loans. Setting up stores in poor neighborhoods seems wrong, but from a business aspect it makes logical sense. Would a corner mini-market open up at the crossroads of two dead end streets? Would a high fashion clothing store open its doors in the middle class section of town? The answer to both questions would be “No”. So what recipe should a cash advance store follow in order to open its doors?
How fair is it for cash advance, payday loan or car title loan stores to be targeted and labeled as predatory for such practices? Most companies will open up a store where they hope plenty of traffic will be generated. A targeted market for these shops would be towards people who make between $25k and $60k. This is the ideal market that statistically makes up the majority of the payday loan industry. With this loan industry being set up to give loans to people with a bad credit history, for whatever reason, it takes both responsible lenders and borrowers to make the transactions successful.
In most business there are going to be a few bad apples. Companies who perform services or sell goods without the consumer’s best interest at heart are spoiling it for others. It doesn’t take many bad apples to spoil the whole bunch. The perfect example with this is with the short-term cash advance industry. There are lenders out there who will charge the high end of regulated fees or in states without regulations, be over the top to collect the extra revenue. Offshore lenders take advantage of their customers by breaking every rule in the industry. Online direct lenders opened the market to millions no matter where they live by going worldwide over the Internet. Can we now generalize reports that payday lenders are predators?
Cipher through the companies with higher end fees or those who represent themselves as pushy to find the good ones out there who have reasonable fees. Good customer service representatives make any good business better. Call the number or enter the store to have your questions answered. You will learn a lot about the philosophy behind the company by talking to their employees. Once you find the good apple to fit your financial needs, you will be able to take care of business in a successful manner. No one can prey on you if you are in control of the situation and know what you are looking for in a company.
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I am a Blogger, Web Content Writer, Teacher, Mom. A woman of many hats. As an elementary teacher, I had always encouraged my students to write more. I find myself falling back on my own teaching techniques to share what I know about building and rebuilding personal finances.