Fact v. Fiction
There have been numerous unfounded attacks on the payday lending industry this past year. In response to these false claims, here are the facts that dispel the popular myths and misconceptions made by our detractors.
FICTION:
Payday cash advance customers are uneducated, downtrodden, unemployed, irresponsible people.
FACT:
Our average customer makes $42,000 a year, has to be gainfully employed in order to receive a payday cash advance, and must have a checking account. They come to payday lenders because they are responsible and want to pay their bills on time. The notion that he or she can’t make their own financial decisions is insulting and nonsense.
FICTION:
You will pay exorbitantly for a payday cash advance.
FACT:
Compared to what? The outrageous fee you’ll pay if you bounce a check? The huge fee you will pay if you’re late paying a credit card bill? Your late fee at a video rental store? Ours is a set price for a short-term transaction. You wouldn’t take a taxi from New York to Los Angeles, and you wouldn’t take out a payday cash advance to pay for four years of college. The fee argument is simply irrelevant.
FICTION:
Payday lenders could still operate profitably if they charged a much smaller APR.
FACT:
No, we wouldn’t. We write-off a certain amount of payday cash advances each year and we incur costs of operation. We have offices to operate and employees to pay. And as a rule, our profits are less than most media businesses (many of which have questioned our profit margins), most banks, most high tech companies, etc.
FICTION:
Payday cash advance customers should just go to a bank instead.
FACT:
And have the door slammed in their faces. The banks no longer make cash advances of less than $2,000, and as we stated above, bounced check fees are significantly higher than ours.
FICTION:
Payday cash advance customers resent payday lenders.
FACT:
No, a few groups who have had no real experience with the payday cash advance industry resent us. Our customers value us and demand our services. Ask them. A fair, open-minded examination of our customers and our business practices would force our detractors to go find another target for their misplaced indignation.
FINAL FACT:
Not everyone is cash rich. Some people encounter the occasional financial bump and need help. That is why payday lenders exist. We encourage responsible regulation, but we object to those who would take away a valued and important service that helps millions of Americans, simply because of misinformed prejudice.