A couple of months ago, my mother received a check for $556.00 in the mail from a certain 'payday loan' company. While I can't excuse her, my mother's mental state and dementia told her the check was the 'gift from God' she'd asked for so she got a friend to take her to the bank where she cashed it. I found out about this only after Mom started receiving the notices of her repayment schedule. She has to pay back 9 payments of $111.00 meaning she'll be paying a total of $999.00 on $556.00. I get it: Short term loans, high interest and high payback amount. Okay, she fell for it. We hear about it all the time. Elderly people are targets for things like this.
Mom decided she'd get a little bit ahead on her payments so she wrote one check for two payments or $222.00 on the due date. That's pretty bold for someone who only receives $702.00 in Social Security each month. Six days after the payment was received, she gets notified that her "check was returned." My mother has a checking account with overdraft protection so I thought she simply misunderstood. Well, we both misunderstood. How?
The company returned the check--not the bank. Mom didn't know the special previsions that they had set up for this situation. The company "does not accept" more than one payment at a time when paid by check. Why? Because this enables the company to use loopholes and the English language to get as much money as possible from her(and anyone else). I can't say that I would've thought to send two separate checks myself.
So Mom's check for $222.00 was returned to the neighborhood office as if it had never been paid. Then because now it is technically 'late,' they added a $20.00 late fee AND $36.00 for a 'returned to the office' fee. Now this comes to a $167.00 for EACH--yes, the payment due AND the payment she thought she was making to get ahead! Guess what? Yep, another $111.00 payment is due this month!Grand total? $445.00...and counting!
I'm expecting legal threats to come at her at anytime.
I must confess that I really didn't see the harm in "payday loan" places in commercials I've seen on television. But I didn't realize that some of these places send out checks in hopes of them being cashed. It's brilliant actually because if the customer complains, the company rep can just smile and say, "Well they shouldn't have cashed the checks!" It is the perfect plan.
Reminds me of a fisherman who baits the hook just hoping they'll get a bite so they can 'reel that sucker in.' That is certainly what they got with my mother--a sucker. Hook, line and sinker.