Maybe, the insurance story didn’t get to you. How’s this?
PAGE ONE
SOCIAL INSECURITY
High-Interest Lenders
Tap Elderly, Disabled
By ELLEN E. SCHULTZ and THEO FRANCIS
February 12, 2008; Page A1
DOTHAN, Ala. — One recent morning, dozens of elderly and disabled people, some propped on walkers and canes, gathered at Small Loans Inc. Many had borrowed money from Small Loans and turned over their Social Security benefits to pay back the high-interest lender. Now they were waiting for their “allowance” — their monthly check, minus Small Loans’ cut.
The crowd represents the newest twist for a fast-growing industry — lenders that make high-interest loans, often called “payday” loans, that are secured by upcoming paychecks. Such lenders are increasingly targeting recipients of Social Security and other government benefits, including disability and veteran’s benefits. “These people always get paid, rain or shine,” says William Harrod, a former manager of payday loan stores in suburban Virginia and Washington, D.C. Government beneficiaries “will always have money, every 30 days.”
As a result, these lenders, which pitch loans with effective annual interest as high as 400% or more, can gain almost total control over Social Security recipients’ finances.
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