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Chicagoan Files Class Action Suit Against Americash

danarhea

danarhea

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Here's the deal. A man goes into a payday loan outlet and borrows 700 smackeroos. He later cannot make his payments time, so then borrows 400 more which go towards making the payments he is behind. The result? He ended up owing 3500 on his initial loan of 700.

Under the agreement Johnson signed, Americash required him to pay back the loan in 24 semi-monthly installments of $105.30 for one full year, totaling $2,611 dollars, equivalent to a 365 percent annual interest rate. After making steady payments for 6 months, Johnson just couldn't dig up the necessary funds to pay off his increasing debt. So Americash provided him a second loan in February of this year for $400 dollars and with virtually the same terms. Now, if he pays off both loans on time and in full, he will have forked over almost $3,500 to Americash, all for $700 in short-term financial assistance.
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That's a 500 percent interest rate. So my question to the man is this:

Are you out of your ever loving mind?

Another question - Why are you suing? Did Americash put a gun to your head and tell you to take the loan? Of course, they didn't. They had some money. You wanted to borrow some money. They gave you terms which were excessive as hell. You agreed to those terms. IMHO, YOU are one of the reasons that Darwin's Law even exists.


The question we should ask is not why Americash is a bunch of low-life money grubbers. They are, no doubt about it. What we SHOULD be questioning are the man's intelligence, and also why something like this ends up in court. He is responsible for his own actions, and taking out stupid loans are nobody's fault but his. Period.

Article is here.
 
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Anyone that sets foot in those stores is pretty much uneducated with regards to why it is not a bank.

This is why it is not a bank.
 
Anybody who even thinks of using the "services" of a payday loan outfit needs to recognize that they are just thinly-disguised loan sharks under a different name.
 
Birdzeye said:
Anybody who even thinks of using the "services" of a payday loan outfit needs to recognize that they are just thinly-disguised loan sharks under a different name.
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Exactly, how those guys and rent to owns are legal is beyond me, I wouldn't take the interest rates they present at any cost, if my credit was shot, I'd sit on milk crates before using those services, you can't get ahead with them.
 
No one is suggesting a kink in America's credit industry are they?
 
Question...Should these places be regulated ?
I think that they should ,if the state can make money and save people grief..
Answer...I don't know...
This I do know...It is not right to take advantage of another man's ignorance....
First we must eliminate the scumbags(both the borrower and the lender)....This is done via a good education system....If the system is good and still we have stupid victims and loan-sharks..Then what else can a man do ?
Apply Darwin's principle..:3oops:
 
I used one once, when I was working a job that paid $9 an hour, and the pay day fell too far past my rent due date, for me to wait until I got paid. When I went in to pay it back in full, the first question they asked me, is if I wanted to rollover the loan and take out another one. Thats when I knew these places were just shady as hell. They don't really want to give you a short loan to tie you over, they want to build up their accounts receivable files.

Also my step father joined a buisness venture, where a substantial amount of the investment was in a chain of these types of businesses, but soon sold off his share in the investment. He said there was just something wrong about making money off of people who didn't have that much to begin with.

Still, people have to excercise some personal responsibility for the decisions they make. Changing the laws, isn't going to make you less of an idiot.
 
I'm not so sure you can successfully sue these guys. I'm sure everything was in the contract the man signed. But there may be some form of protectionism. I always say be careful with contract, we have the right to contract and that means that you should understand what you sign because you're ultimately held responsible for upholding the contract. But who knows how Chicago works it, depends on which side can successfully bribe the system better I suppose. Regardless, those payday loan places are nothing short of rip offs. It's understandable that some people would maybe need to use one, especially now, but in the end it's not beneficial. Poor dude got screwed on this one.
 
Ikari said:
I'm not so sure you can successfully sue these guys. I'm sure everything was in the contract the man signed. But there may be some form of protectionism. I always say be careful with contract, we have the right to contract and that means that you should understand what you sign because you're ultimately held responsible for upholding the contract. But who knows how Chicago works it, depends on which side can successfully bribe the system better I suppose. Regardless, those payday loan places are nothing short of rip offs. It's understandable that some people would maybe need to use one, especially now, but in the end it's not beneficial. Poor dude got screwed on this one.
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Poor dude screwed HIMSELF, and I cannot stand people like him who are unwilling to accept responsibility for their own actions.
 
danarhea said:
Poor dude screwed HIMSELF, and I cannot stand people like him who are unwilling to accept responsibility for their own actions.
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True, but I'm still more outraged at the business taking advantage of such stupidity. Yeah, I know, that's life, but that doesn't mean I can't condemn what I consider shady business practices.
 
Birdzeye said:
True, but I'm still more outraged at the business taking advantage of such stupidity. Yeah, I know, that's life, but that doesn't mean I can't condemn what I consider shady business practices.
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Sure, it's shady business practice, but the man knew exactly what he was getting into, and how much he would have to pay BEFORE he signed the contract and received the money. That makes it HIS fault. Now, if the government wants to pass a bill against usury, they can do that, but this issue has no place in a court of law.
 
danarhea said:
Here's the deal. A man goes into a payday loan outlet and borrows 700 smackeroos. He later cannot make his payments time, so then borrows 400 more which go towards making the payments he is behind. The result? He ended up owing 3500 on his initial loan of 700.

That's a 500 percent interest rate. So my question to the man is this:

Are you out of your ever loving mind?

Another question - Why are you suing? Did Americash put a gun to your head and tell you to take the loan? Of course, they didn't. They had some money. You wanted to borrow some money. They gave you terms which were excessive as hell. You agreed to those terms. IMHO, YOU are one of the reasons that Darwin's Law even exists.

The question we should ask is not why Americash is a bunch of low-life money grubbers. They are, no doubt about it. What we SHOULD be questioning are the man's intelligence, and also why something like this ends up in court. He is responsible for his own actions, and taking out stupid loans are nobody's fault but his. Period.

Article is here.
Click to expand...

Personally I was under the impression that there were laws against "usurious" interest rate charges. Apparently I was wrong. I personally find such businesses as being predatory and should have caps on the rates that can be charged commensurate with the costs and risks associated with such loans; something perhaps like 36 to 50%.

Here is an interesting article with a counter point to my views on such usurious businesses:

Shurtleff defends payday loan rates
By Lee Davidson
Deseret Morning News
Published: Wednesday, Jan. 30, 2008 12:22 a.m. MST

Utah Attorney General Mark Shurtleff said Tuesday that banning "payday loans" could hurt the poor more than it would help them and could force more of them into bankruptcies or repossessions.

But debating against that was University of Utah law professor Christopher Peterson, an expert on predatory lending. He said payday loans are essentially legalized loan sharking that can bury the unwary into deep debt. He said societies for millennia have banned the sort of high interest rates that payday lenders now charge.
......

Shurtleff said, "I've done a lot of research in this area. And I truly believe in my heart of hearts that the people's good is best served by competition" and allowing payday loans as an option besides such things as bouncing checks or pawning goods.

He said a recent study by staff of the Federal Reserve Bank of New York also concluded that after Georgia and North Carolina banned such loans, former users migrated to costlier alternatives, including bouncing checks (and paying expensive bank fees to cover them), or filing for bankruptcy.

Peterson, who has written books examining predatory lending practices, said that study was flawed and did not control for many variables that could have increased bankruptcies and bounced checks. He said payday loans do hurt the poor.

.......

But since then, the median cap among states is 400 percent, and many states, including Utah, have no caps — which led to the rise of payday loans. Nationally, Peterson said, more payday lenders exist now than McDonalds, Burger King, J.C. Penneys and Target stores combined.

Deseret News | Shurtleff defends payday loan rates
 
Truth Detector said:
Personally I was under the impression that there were laws against "usurious" interest rate charges. Apparently I was wrong. I personally find such businesses as being predatory and should have caps on the rates that can be charged commensurate with the costs and risks associated with such loans; something perhaps like 36 to 50%.

Here is an interesting article with a counter point to my views on such usurious businesses:

Shurtleff defends payday loan rates
By Lee Davidson
Deseret Morning News
Published: Wednesday, Jan. 30, 2008 12:22 a.m. MST

Utah Attorney General Mark Shurtleff said Tuesday that banning "payday loans" could hurt the poor more than it would help them and could force more of them into bankruptcies or repossessions.

But debating against that was University of Utah law professor Christopher Peterson, an expert on predatory lending. He said payday loans are essentially legalized loan sharking that can bury the unwary into deep debt. He said societies for millennia have banned the sort of high interest rates that payday lenders now charge.
......

Shurtleff said, "I've done a lot of research in this area. And I truly believe in my heart of hearts that the people's good is best served by competition" and allowing payday loans as an option besides such things as bouncing checks or pawning goods.

He said a recent study by staff of the Federal Reserve Bank of New York also concluded that after Georgia and North Carolina banned such loans, former users migrated to costlier alternatives, including bouncing checks (and paying expensive bank fees to cover them), or filing for bankruptcy.

Peterson, who has written books examining predatory lending practices, said that study was flawed and did not control for many variables that could have increased bankruptcies and bounced checks. He said payday loans do hurt the poor.

.......

But since then, the median cap among states is 400 percent, and many states, including Utah, have no caps — which led to the rise of payday loans. Nationally, Peterson said, more payday lenders exist now than McDonalds, Burger King, J.C. Penneys and Target stores combined.

Deseret News | Shurtleff defends payday loan rates
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That should come about by the legislative process, and not legislated by the courts.
 
Here's the solution.

Withdraw the restrictions on use of force to collect loans.

Back when people had their kneecaps busted, they stayed away from loan sharks, didn't they?
 
Scarecrow Akhbar said:
Here's the solution.

Withdraw the restrictions on use of force to collect loans.

Back when people had their kneecaps busted, they stayed away from loan sharks, didn't they?
Click to expand...

/facepalm


Here is the real deal. As sinister as these business types are, the reason they charge what they do is because the people taking out these type of loans are of the highest risk class that can possibly exist. They deal largely with druggies, junkies, and derelicts. If a lower rate could be extended and a profit still be easily turned, sign me up for the new business venture.
 
Sad part is, this guy is gonna win and probably get paid... well his lawyer will get paid, he however will get something out of it.

These places exist, and if you're dumb enough to use one, and get yourself screwed over that's your problem.

The wife an I went and bout some beds for the kids this past weekend, they wanted us to sign up for thier "No interest payment plan". Rate? 26.8%.

What's the difference between that furniture company and these loan sharks?
 
ARealConservative said:
/facepalm


Here is the real deal. As sinister as these business types are, the reason they charge what they do is because the people taking out these type of loans are of the highest risk class that can possibly exist. They deal largely with druggies, junkies, and derelicts. If a lower rate could be extended and a profit still be easily turned, sign me up for the new business venture.
Click to expand...

No one thinks about that when they call for regulating interest rates.

Good point.
 
I live in Missouri and heard about a similar case in Arkansas a number of years ago. Apparently in AR they have a state law capping interest rates on loans to a "reasonable" amount. Its been a long time ago and I didnt pay a heck of alot of attention but I believe the person sueing won the case due to "unreasonable" interest.
 
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