Louisiana’s Payday Lenders Continue to Prey On Elderly, Disadvantaged Residents
By Paul RizzoPayday Loan Writer
Recently, an elderly woman in Acadiana, La., placed a call to her local Better Business Bureau office. Why?
Because she didn't understand why the money contained in her Social Security check was being deposited directly into the bank account of a local payday loan company.
Meanwhile, another older couple living in Crowley, La., came into the same office after realizing they put their house up as collateral in return for a payday loan they subsequently fell behind on.
“The vast majority of people do not ask the right questions. A lot of people don’t even understand the contract, but there is not much we can do about that. We feel powerless. I have heard some horribly sad stories, and I think in a lot of cases, the companies do prey on the low income, low educated and the desperate," said Sharane Gott, president of the Better Business Bureau of Acadiana. "They know they don’t have the capability to read the contract fully. That’s the calls we get — ‘help me understand’ — so we hold their hand and try to help them.”
Louisiana state law prohibits the use of one's home or direct-deposit Social Security checks as collateral with no faxing payday loans, but these people became entangled in multiple loans with payday loan companies and clearly did not read the fine print on the accompanying paperwork.
“They weren’t aware of the repercussions of the documents they were signing. The business knows what to do, what’s legal, what’s not, but it is the feeling of the bureau they do a real fast shuffle,” Gott said.
With seemingly innocuous names like Mr. Check, Money Mart and Cash Cow, the payday loan stores in Louisiana offer high-interest products that they say serve a need in the community, but that critics say should be outlawed, according to the Independent.
“Payday loan companies say their growth indicates there is a big demand for their services,” says Jordan Ash, director of financial issues for the national consumer group ACORN, “The same could be said for people buying crack cocaine. Lots of folks buy crack, but that doesn’t mean there’s a legitimate need for it.”
