S/o D.R. Desperate taken advantage of - tax refunds?

[Murphy101]

So while pondering the ever head scratching inducing opinions of my fellow humans on that thread...

 

It occurred to me that every year thousands if not millions of Americans are taken advantage of by instant tax refund loans.

 

You know what I mean? Those places where they do your taxes for you and charge an obscene amount of of the percentage of your refund to cut you a check right then instead of waiting a few weeks to get a direct deposit?

 

Every single person I now that does this says they are so "desperate" for the funds to pay bills or whatever that they cannot wait for the refund even it means they will have an additional several hundred dollars just by waiting a few weeks.

 

So is this an immoral business? Should good Christians refuse to work for these tax places? (it's considered a great seasonal job for many people)

 

I'm can't see how this is any different than buying something for a bargain off someone who says they are desperate to sell.

 

Curious to see if others see it the same...

[lionfamily1999]

Stop making so much sense!

[Mrs Mungo]

I don't see it as the same, I see that as worse. I think predatory lending should be stopped.

[Joy at Home]

I see this as a loan with very high interest, not unlike the short-term payday loans one can take out for a few weeks and pay back with ridiculous interest. They are essentially loaning you the money pending the refund.

 

I guess like everything else people have to make an informed decision here. They can choose to wait for the refund. As long as full disclosure is made up front, I don't see anything immoral in it.

 

Lisa

[Chris in VA]

Is it predatory lending?

Yuck.

I once thought of doing a work-at-home job that involved talking to people to get them ready to apply for loans--I think it was pay day loans (details are fuzzy). Anyway, I just couldn't do it--I don't think charging that much interest is ethical. Even tho it'd be a great job for ME, it felt, IDK, dirty or something.

 

But I don't know if the refund thing is the same.:confused:

[NoPlaceLikeHome]

I don't see it as the same, I see that as worse. I think predatory lending should be stopped.

 

:iagree:

[NoPlaceLikeHome]

I see this as a loan with very high interest, not unlike the short-term payday loans one can take out for a few weeks and pay back with ridiculous interest. They are essentially loaning you the money pending the refund.

 

I guess like everything else people have to make an informed decision here. They can choose to wait for the refund. As long as full disclosure is made up front, I don't see anything immoral in it.

 

Lisa

 

Yes but it amounts to usury from what I have read in the past since the interest rates are beyond outrageous:(.

[GWOB]

I see it as vile. It really only takes 10 days or so to get the direct deposit. We gladly wait the 10 days instead of spending a large portion of our return for immediate gratification.

[Joy at Home]

Yes but it amounts to usury from what I have read in the past since the interest rates are beyond outrageous:(.

 

 

I agree it is vile. I am not a fan of predatory lending, but the fact is it's out there and legal, so it's important to be informed, and make the CHOICE not to participate.

 

Lisa

Edited December 18, 2010 by Momto5girls

[Mejane]

So is this an immoral business? Should good Christians refuse to work for these tax places? (it's considered a great seasonal job for many people)

 

 

 

I don't know if it's an immoral business, but I do think it's an immoral practice. I'm not Christian, so I can't speak to that.

[lionfamily1999]

I see it as vile. It really only takes 10 days or so to get the direct deposit. We gladly wait the 10 days instead of spending a large portion of our return for immediate gratification.

But it's a service rendered and the person getting into it understands it (even if it seems they are incapable of seeing how they're getting taken advantage of). I would not even compare it with pay day loans, which are loans where the person is expected to return and pay it (or else face strange and far reaching consequences). In this case, it's a matter of a bird in the hand. In the other it's counting their eggs before they're hatched.

 

 

 

 

 

I remember seeing something about people being offered $100 in one year, or $105 (or something like that) in one year and two days. They all went for the $105, after all it was only two days. Then, they were told they could get $100 today OR $105 tomorrow. Every.single.time. they went for the $100 today. This was a movie about economics, but I can't remember the name. They also did auctions for a 20 dollar bill. What was crazy is that it finally sold for more than $25 (I can't remember the exact amount, I think it was $28). So, are these people being taken advantage of? They're making choices. Desperation aside, they're using their emotions to dictate their finances.

 

Also, I really think that desperation is getting overused. People are desperate for a break in the weather, people are desperate for adult conversation. It's stopped meaning that they're in life or death need.

[GWOB]

But it's a service rendered and the person getting into it understands it (even if it seems they are incapable of seeing how they're getting taken advantage of). I would not even compare it with pay day loans, which are loans where the person is expected to return and pay it (or else face strange and far reaching consequences). In this case, it's a matter of a bird in the hand. In the other it's counting their eggs before they're hatched.

 

 

 

 

 

I remember seeing something about people being offered $100 in one year, or $105 (or something like that) in one year and two days. They all went for the $105, after all it was only two days. Then, they were told they could get $100 today OR $105 tomorrow. Every.single.time. they went for the $100 today. This was a movie about economics, but I can't remember the name. They also did auctions for a 20 dollar bill. What was crazy is that it finally sold for more than $25 (I can't remember the exact amount, I think it was $28). So, are these people being taken advantage of? They're making choices. Desperation aside, they're using their emotions to dictate their finances.

 

Also, I really think that desperation is getting overused. People are desperate for a break in the weather, people are desperate for adult conversation. It's stopped meaning that they're in life or death need.

 

I understand what you are saying, but I still think it is a misleading, cruel, and disgusting practice. It takes advantge of people in dire need of money. It's the same as sub-prime loans IMO.

[lionfamily1999]

I understand what you are saying, but I still think it is a misleading, cruel, and disgusting practice. It takes advantge of people in dire need of money. It's the same as sub-prime loans IMO.

Has anyone experienced credit ramifications from this? I never even saw the 'fee' as a loan fee (although I know it's worded that way). Everywhere I know to get taxes done now offers it, and I'm not sure they could survive if they didn't. This is so automatic for so many now, that I'm guessing they would fight tooth and nail to keep the option.

 

And really, the people I know that are in "dire" need aren't really. They could wait. It's just the idea of the money that's already burning a hole in their pocket. If that wasn't so, then there wouldn't be so many stores that offer to do taxes just so people could spend the money before they even get to see a check :glare:

[Renee in NC]

There won't be as much of this going on. The IRS really frowns on the practice, so they quit publishing the "deadbeat list." OK, that isn't what it is really called, but it is a list that shows whether people owe the feds, state, student loans, child support, etc. If so, they couldn't get one of those "Refund Anticipation Loans."

 

Now, most of the tax places are using a credit-based version with a much lower acceptance rate - for example, one big tax prep place has a an acceptance rate of about 18%. Everyone else has to wait the same 8-15 days as everyone else. The banks that used to back these are getting out of the business because now the risk is too high and the public relations is becoming a nightmare.

 

I don't see much difference between check cashing places, these tax places that offer the crazy loans, and the old-fashioned loan shark. Of course, there is one big difference - loan sharking is illegal. :glare:

[MrsBasil]

We had this offered twice to us. One time the woman tried to paint it as a really great deal because we got our money RIGHT NOW. That was at a time when having food was somewhat spotty. We still opted to wait.

 

The second time the woman was quite up front. She mentioned that we could get it direct deposit or by mail and we would get all of our refund or they could give us the money right now, but we would get less money back because they would be a taking a "somewhat significant" portion out. We opted for direct deposit.

 

The people I knew who opted for cash up front didn't have bank accounts or were very broke. Or drug users. Sometimes all 3.

 

I don't like the practice, but I think I could work at one of those places if I was able to be upfront about the drawbacks of the cash now option. I would be uncomfortable though. I know how hard it is when there's no money at all, but at the time we didn't have kids to feed at that time either. If I was in the same position I used to be in, but had my son...it would be harder to say no.

[Murphy101]

I don't see it as the same, I see that as worse. I think predatory lending should be stopped.

 

I find this concept of "predatory" lending to be mildly amusing. I've never heard of lending that is NOT predatory. They all take advantage of people who can't afford to pay a lump sum of cash for ____. They all give higher rates of interests to those most in need of the loan in the worst situations. They all encourage taking as much debt as can be approved for. It's all predatory as far as I can tell.:tongue_smilie:

 

I see this as a loan with very high interest, not unlike the short-term payday loans one can take out for a few weeks and pay back with ridiculous interest. They are essentially loaning you the money pending the refund.

 

That is EXACTLY the legal definition and the contract agreement.

 

I see it as vile. It really only takes 10 days or so to get the direct deposit. We gladly wait the 10 days instead of spending a large portion of our return for immediate gratification.

 

For clarification. Is it vile that people agree to it or is it vile that it is offered?

 

But it's a service rendered and the person

getting into it understands it (even if it seems they are incapable of seeing how they're getting taken advantage of). I would not even compare it with pay day loans, which are loans where the person is expected to return and pay it (or else face strange and far reaching consequences).

 

Hmm. Varies by state some. Here payday loans are not handled any differently than the refund advance loans. There's nothing strange or far reaching about the consequence. You agree that on blank day, if you have not paid your loan, they can garnish your bank account and or paycheck for the amount owed and risk it affecting your credit rating. Doesn't seem too unreasonable a consequence?

 

Also, I really think that desperation is getting overused. People are desperate for a break in the weather, people are desperate for adult conversation. It's stopped meaning that they're in life or death need.

 

:iagree: When I have heard people say they couldn't wait 2-3 weeks for the refund it is rarely for truely desperate reasons. There's not many bills that can't wait 2 weeks if arrangements are made. Not many purchases that if one has waited however long, can't wait another couple of weeks. There might be a few times where the cost of waiting might entail other fees more than the cost of the rapid refund loan.

 

Only once was it really necessary. They would run out of med in a few days. They said. I offered to pay for the meds so they could get a bit more funds by waiting and they turned me down.:glare::confused:

 

I understand what you are saying, but I still think it is a misleading, cruel, and disgusting practice. It takes advantge of people in dire need of money. It's the same as sub-prime loans IMO.

 

Misleading? Cruel? Disgusting? Those a rather strong words for a very clear cut and obvious deal. What, precisely, is misleading and cruel? Not being snarky. Honest question bc I have friends who do this as a seasonal job and I've seen the adverts and paperwork. It's very clear exactly what is being agreed to. So clear in fact, that I think anyone who doesn't understand might not be capable of handling their own finances. But to be fair, I will say there are a scary number of folks who aren't capable of that. For that matter, some might think I am one of them!:tongue_smilie:

 

And really, the people I know that are in "dire" need aren't really. They could wait. It's just the idea of the money that's already burning a hole in their pocket.

 

This has been my observations too.

[Abigail4476]

I understand what you are saying, but I still think it is a misleading, cruel, and disgusting practice. It takes advantge of people in dire need of money. It's the same as sub-prime loans IMO.

 

Sometimes it takes advantage of people in dire need of money; sometimes it's a response to greed or irresponsibility on the part of the person wanting extra money.

 

Regardless, I agree that predatory lending should be stopped. On a Christian note, we aren't supposed to participate in usury (mentioned already), and therefore I do believe it would be wrong for a Christian to run such a business.

 

 

Exodus 22:25 "If you lend money to any of my people who are poor, do not act like a moneylender and require him to pay interest."

[Little Nyssa]

If you worked there but explained carefully to the customer what their choices are, I think it would be OK.

[elizabeth]

http://www.harpercollins.com/books/Broke-Usa-Gary-Rivlin/?isbn=9780061997945

A timely and very informative book on the subject of predatory lending. Please consider carefully how incredibly wealthy the companies are that employ these tactics and how that is tied to and a large part of the mortgage crisis. The free market, left untrammeled by any regulation is all too often treated by non economists as an idol. I do understand when the top 5% aka the truly wealthy treat it as a sacred cow as they actually have a dog in the fight. When persons of modest means promote and support policies that do terrible economic harm to themselves and certainly to other families in similar income brackets it is, to state it plainly, nonsense and sycophantic.

[jld]

http://www.harpercollins.com/books/Broke-Usa-Gary-Rivlin/?isbn=9780061997945

A timely and very informative book on the subject of predatory lending. Please consider carefully how incredibly wealthy the companies are that employ these tactics and how that is tied to and a large part of the mortgage crisis. The free market, left untrammeled by any regulation is all too often treated by non economists as an idol. I do understand when the top 5% aka the truly wealthy treat it as a sacred cow as they actually have a dog in the fight. When persons of modest means promote and support policies that do terrible economic harm to themselves and certainly to other families in similar income brackets it is, to state it plainly, nonsense and sycophantic.

 

:iagree::iagree::iagree:

 

But how to get people to see they are supporting ideas that are against their interests, elizabeth?

[Peela]

I think there are certain jobs in society that certain people do...the leeches, the bottom suckers. The shady people.

It's not illegal, obviously, but it's icky.

Who knows what forces in a person's life created them to be willing to do that job...but the truth is, society is made up of all sorts, from the upright to the downright sleezy to the desperate and to those who feel morally righteous because *they* would never sink to such depths. But as long as there are desperate people who don't manage their money well....and they could possibly be any of us given an unforseen change in circumstance... there will be people to leech off them.

 

I feel much more strongly about socially acceptable and even glorified jobs that are inherently life negating, environmentally destructive, or encourage inhumanity...than I do about those that are obviously seedy and sucking off the desperate.

[lionfamily1999]

I think there are certain jobs in society that certain people do...the leeches, the bottom suckers. The shady people.

It's not illegal, obviously, but it's icky.

Who knows what forces in a person's life created them to be willing to do that job...but the truth is, society is made up of all sorts, from the upright to the downright sleezy to the desperate and to those who feel morally righteous because *they* would never sink to such depths. But as long as there are desperate people who don't manage their money well....and they could possibly be any of us given an unforseen change in circumstance... there will be people to leech off them.

 

I feel much more strongly about socially acceptable and even glorified jobs that are inherently life negating, environmentally destructive, or encourage inhumanity...than I do about those that are obviously seedy and sucking off the desperate.

I had no idea that accountants and H&R Block workers were so frowned upon. :001_huh:

I find this concept of "predatory" lending to be mildly amusing. I've never heard of lending that is NOT predatory. They all take advantage of people who can't afford to pay a lump sum of cash for ____. They all give higher rates of interests to those most in need of the loan in the worst situations. They all encourage taking as much debt as can be approved for. It's all predatory as far as I can tell.:tongue_smilie:

 

Hmm. Varies by state some. Here payday loans are not handled any differently than the refund advance loans. There's nothing strange or far reaching about the consequence. You agree that on blank day, if you have not paid your loan, they can garnish your bank account and or paycheck for the amount owed and risk it affecting your credit rating. Doesn't seem too unreasonable a consequence?

 

They're illegal here now. Those title loans too (I believe), because they had too many people that were unable to pay on payday and ended up owing far over what they had initially borrowed (in excess of 200%). People were losing shelter over pay day loans.

 

Now, I'll give you that it was their own fault. They signed up to get a loan on Friday's paycheck assuming either they were going to get more money or else have no bills popping up and I see this as wishful thinking or self enforced blindness. But then, we prefer to lose a utility for a short time rather than find snowballing debt.

[NoPlaceLikeHome]

I understand what you are saying, but I still think it is a misleading, cruel, and disgusting practice. It takes advantge of people in dire need of money. It's the same as sub-prime loans IMO.

 

:iagree:

[NoPlaceLikeHome]

 

 

Also, I really think that desperation is getting overused. People are desperate for a break in the weather, people are desperate for adult conversation. It's stopped meaning that they're in life or death need.

 

I think sometimes people are foolish with their money. OTOH I think many people are desperate from time to time in this country. Some are desperate to pay the rent to keep a roof over their heads. Some are desperate to keep food on the table. I think one could do everything right and still end up being in desperate situations.

[cathmom]

 

Now, I'll give you that it was their own fault. They signed up to get a loan on Friday's paycheck assuming either they were going to get more money or else have no bills popping up and I see this as wishful thinking or self enforced blindness. But then, we prefer to lose a utility for a short time rather than find snowballing debt.

 

Or maybe the needed the money that day to pay for a car repair so they can get to work (and not be fired) and then on pay day, their child gets sick and they have to pay for the dr. When you are living that close to the edge, sometimes you just need the money that day.

[pqr]

The free market, left untrammeled by any regulation is all too often treated by non economists as an idol. I do understand when the top 5% aka the truly wealthy treat it as a sacred cow as they actually have a dog in the fight. When persons of modest means promote and support policies that do terrible economic harm to themselves and certainly to other families in similar income brackets it is, to state it plainly, nonsense and sycophantic.

 

So now those of us who believe in fairness are dealing in nonsense and sycophancy? ....yet those who promote class warfare are being honest? This is your argument? Scr#w the wealthy?...and you talk about nonsense?

 

What you are speaking for is a classic "us against them" mentality and has led to the dehumanizing of people and frankly some of the worst horrors of the last century. I find it stunning that people are buying into this.

 

Yes there are issues with some aspects of the free market and things that need be fixed (usury laws?) but you are not pushing for that, what you are pushing for (at least what your comments indicate) is the view that somehow wealthy (and I am not in the top bracket, far from it) are different and that it is acceptable to take from them, that it is acceptable that they pay more for the same service than I pay, that they have no interest in their fellow man and hence we need have no interest in them.

 

Your words echo those heard in other years, one only need change "truly wealthy" (your words) for kulak, bourgeois, aristocrat, landowner, noble, or a few words used in Europe in the 1930s and I can find you quote after quote that advocates the class warfare.

 

Lest one think that they are not paying their fair share, remember that the top 1% of earners in the US in 2007 paid more in taxes than the bottom 95%.

http://economix.blogs.nytimes.com/2009/07/30/top-1-paid-more-in-federal-income-taxes-than-bottom-95-in-07/

Even if one were interested in class warfare only the truly ignorant would want to kill this golden goose.(look to post revolutionary Russia for examples of what happens when this goose is eliminated) We knock off that top 1% out and we see a huge increase in taxes for the rest of us. In 2007 they paid over 40% in FEDERAL income taxes! This does not count other taxes such as, State, Sales etc.

 

Now as to the top 5% being the, how did you put it? Oh yes... "the truly wealthy" it may do you well to remember that in that for a few years back (most recent figures I found) "top 5% of households, three quarters of whom had two income earners, had incomes of $166,200." (see link at bottom) Now I am not close to that level, it is more the income level in some places of dual incomes including good lawyers, average doctors and bad or potentially corrupt politicians, but even so in many parts of this nation that income does not make one "truly wealthy." In other areas, where that figure enables one to live very well, we call these people businessmen and employers. I like them, I wish we had more and I guarantee that many without a job wish that there were more employers as well.

 

Nonsense and sycophancy........really? This is how you view those who disagree with you?????

 

 

 

 

 

 

http://pubdb3.census.gov/macro/032006/hhinc/new05_000.htm

Edited December 18, 2010 by pqr

[unsinkable]

So while pondering the ever head scratching inducing opinions of my fellow humans on that thread...

 

It occurred to me that every year thousands if not millions of Americans are taken advantage of by instant tax refund loans.

 

You know what I mean? Those places where they do your taxes for you and charge an obscene amount of of the percentage of your refund to cut you a check right then instead of waiting a few weeks to get a direct deposit?

 

Every single person I now that does this says they are so "desperate" for the funds to pay bills or whatever that they cannot wait for the refund even it means they will have an additional several hundred dollars just by waiting a few weeks.

 

So is this an immoral business? Should good Christians refuse to work for these tax places? (it's considered a great seasonal job for many people)

 

I'm can't see how this is any different than buying something for a bargain off someone who says they are desperate to sell.

 

Curious to see if others see it the same...

 

Along the same vein, an aquaintance of mine was telling me how instead of sending his kid to college he was considering opening a payday loan business with his kid.

 

My answer was "if you could live with yourselves."

[vonfirmath]

I understand what you are saying, but I still think it is a misleading, cruel, and disgusting practice. It takes advantge of people in dire need of money. It's the same as sub-prime loans IMO.

 

The folks who are getting the cash today to keep from getting kicked out of their house/getting electricity shut off may think it is worth it even if more expensive in the long run.

 

I know folks that were up in arms when it seemed the payday loan places were going to be put out of business. They were certain it meant they would be homeless because no one else would lend to them.

 

I would never use either. But I can not find it in me to make the options illegal for those who feel that is their only choice.

[TravelingChris]

I see a big difference between payday and title loan businesses and income tax filing businesses which also offer instant refunds. THe former have only lending as their business and the latter have tax return filing as their primary business and lending only as a secondary. I think I would see the payday and title loan places as sort of sleezy operations but then I think the people who go to them are not usually the most upstanding citizens either. I think these places tend to cater to people living on the margins- some of whom are there with unfortunate circumstances but almost all who are there because of poor lifestyle choices-gambling, drugs, alcoholism, etc. While I wouldn't have an issue with preparing taxes and offering a loan for an instant refund (I would give full disclosure) I wouldn't personally want to be involved in payday or title loans.

[angela in ohio]

I worked at a tax prep office in the city for several years a long time ago. They offered loans for tax refunds.

 

The vast majority of people who are getting these loans are not getting back money they themselves paid in. They are getting EIC, refundable credits, etc. So they don't see it as giving up any of their own money to get the money sooner. They are just getting a bit less "free money" from the government ($2450 instead of $2600, for example.) I think that is a huge part of why they don't bat an eye at the cost.

 

I was shocked the first few times I told people how much it would cost to get the loan and they still did it, but evertually the shock wore off. Every time, I would explain how they could get their EIC in their weekly paycheck and use it to pay bills all year long. :confused: It did no good. Eventually I quit, because seeing the people (and mostly their poor dc) and dealing with their abuse took a huge toll on me emotionally each year. It paid very well, but it wasn't worth the stress.

[angela in ohio]

I would never use either. But I can not find it in me to make the options illegal for those who feel that is their only choice.

 

The payday loan places are actually just a store-front option for what was going on already. No one wants to think about how people with no credit borrowed money before, but they still did it. Putting payday loan places out of business wouldn't change the need. Job training programs, drug treatment programs, financial education, etc. would, but it is easier for politicians to pass a law against payday loan businesses and feel good for "doing something noble for those poor people."

[GWOB]

http://www.harpercollins.com/books/Broke-Usa-Gary-Rivlin/?isbn=9780061997945

A timely and very informative book on the subject of predatory lending. Please consider carefully how incredibly wealthy the companies are that employ these tactics and how that is tied to and a large part of the mortgage crisis. The free market, left untrammeled by any regulation is all too often treated by non economists as an idol. I do understand when the top 5% aka the truly wealthy treat it as a sacred cow as they actually have a dog in the fight. When persons of modest means promote and support policies that do terrible economic harm to themselves and certainly to other families in similar income brackets it is, to state it plainly, nonsense and sycophantic.

 

As always, you say things much better than I ever can.

[TXMomof4]

I understand what you are saying, but I still think it is a misleading, cruel, and disgusting practice. It takes advantge of people in dire need of money. It's the same as sub-prime loans IMO.

 

I would venture that a majority of the people who use these advance payments are not *desperate* in the sense of they won't eat, pay electric, etc. My sis and her ex-dh did this every. single. year because they can't wait to go buy a new tv, take a trip, etc. They do pay some on bills or catch up on what's behind, but they aren't 'desperate' for the money. Just impatient. Most of the people I know lean more to that end of the spectrum than truly desperate.

[GWOB]

I would venture that a majority of the people who use these advance payments are not *desperate* in the sense of they won't eat, pay electric, etc. My sis and her ex-dh did this every. single. year because they can't wait to go buy a new tv, take a trip, etc. They do pay some on bills or catch up on what's behind, but they aren't 'desperate' for the money. Just impatient. Most of the people I know lean more to that end of the spectrum than truly desperate.

 

I should have put "desperate" in quotes. I have so many feelings about this that are hard to articulate with puking kids in the house. Basically, I see it as wealthy business owners taking advantage of people who need immediate gratification, which is a huge problem in our society. Most people CAN afford to wait the short period of time for that direct deposit, but just cannot deprive themselves of that Plasma TV for another day, or in the case of a single mother I know, a new pair of boobs.

[Abigail4476]

I had no idea that accountants and H&R Block workers were so frowned upon. :001_huh:

 

I don't think anyone is putting accountants and H&R block workers on the same level as loan sharks! :confused:

 

I see a big difference between payday and title loan businesses and income tax filing businesses which also offer instant refunds. THe former have only lending as their business and the latter have tax return filing as their primary business and lending only as a secondary. I think I would see the payday and title loan places as sort of sleezy operations but then I think the people who go to them are not usually the most upstanding citizens either. I think these places tend to cater to people living on the margins- some of whom are there with unfortunate circumstances but almost all who are there because of poor lifestyle choices-gambling, drugs, alcoholism, etc. While I wouldn't have an issue with preparing taxes and offering a loan for an instant refund (I would give full disclosure) I wouldn't personally want to be involved in payday or title loans.

:iagree:

[Renee in NC]

I It did no good. Eventually I quit, because seeing the people (and mostly their poor dc) and dealing with their abuse took a huge toll on me emotionally each year. It paid very well, but it wasn't worth the stress.

 

Yes, you can get EIC in your paycheck, but it isn't that much anyway. We do it, but we will still get a massive "refund" every year.

[Renee in NC]

I don't think anyone is putting accountants and H&R block workers on the same level as loan sharks! :confused:

 

 

:iagree:

 

No, I was equating the loans for refunds with loan sharking, not the workers. Not only that, I have never known of an accounting firm that offered Refund Anticipation Loans.:confused: I would think it would be unethical!

[Elaine]

I should have put "desperate" in quotes. I have so many feelings about this that are hard to articulate with puking kids in the house. Basically, I see it as wealthy business owners taking advantage of people who need immediate gratification, which is a huge problem in our society. Most people CAN afford to wait the short period of time for that direct deposit, but just cannot deprive themselves of that Plasma TV for another day, or in the case of a single mother I know, a new pair of boobs.

 

 

"Basically, I see it as wealthy business owners taking advantage of people who need immediate gratification, which is a huge problem in our society.":confused:

 

So you are blaming the wealthy for the woes of the people who can't, or won't, manage their own money?

 

Bottom line is there is a demand for these kinds of places, otherwise they would not be operating. People choose to go into them and get their money in advance, no one forces them. It is not legal loan sharking, it is a business, one that you may not agree with, but a business still. You are not going to get your legs broken or your thumbs put into a vice grip, you just pay a financial price for getting your money early.

 

If someone wants their money early, and is willing to fork over their money to do that, then so be it.

 

Instant gratification is a huge problem in our society, but it is not the fault of the check cashing operations, it is that fault of individuals.

[Barry Goldwater]

I agree it is vile. I am not a fan of predatory lending, but the fact is it's out there and legal, so it's important to be informed, and make the CHOICE not to participate.

 

Lisa

 

:iagree:

 

I think if the government schools had done an adequate job of teaching the mathematical concept of the EXPONENT function, far fewer people would fall victim to this. CAVEAT EMPTOR.

 

Since there is demand for this sort of 'service,' it seems to me that too many don't understand how this sort of practice destroys their ability to build any wealth or stay out of desperate situations...:confused1:

[lionfamily1999]

Or maybe the needed the money that day to pay for a car repair so they can get to work (and not be fired) and then on pay day, their child gets sick and they have to pay for the dr. When you are living that close to the edge, sometimes you just need the money that day.

Yes, but what most learn (hopefully before they lose EVERYTHING) is that these things needed to wait, because the immediate benefit (car repair) comes with chains that are very difficult to break free from. So, what was today a $100 car repair, next week is $150, the week after is $200 and suddenly you find yourself in a black pit of debt, the equivalent of a second mortgage and it seems impossible to get out of.

 

THAT is why I was perfectly happy with VA outlawing the payday/title loan places. People that would have made due, felt they couldn't because they had the opportunity to do otherwise. Then they ended up in a whirlwind of constant debt that was worse and worse and worse with every passing payday.

 

This still, imo, does not compare to the loans on your tax returns. You're signing over your return, you get your check and your business deal is (for all intents and purposes) over. You have zero chance of losing your home or finding yourself in deepening debt.

 

I should have put "desperate" in quotes. I have so many feelings about this that are hard to articulate with puking kids in the house. Basically, I see it as wealthy business owners taking advantage of people who need immediate gratification, which is a huge problem in our society. Most people CAN afford to wait the short period of time for that direct deposit, but just cannot deprive themselves of that Plasma TV for another day, or in the case of a single mother I know, a new pair of boobs.

Bar owners take advantage of alcoholics. Gas station owners take advantage of people that need to drive (or milk in the middle of the night).

 

The desire for instance gratification is an issue in itself, but the only person responsible for it is the one allowing it to lead them to unsound decisions.

 

So while pondering the ever head scratching inducing opinions of my fellow humans on that thread...

 

It occurred to me that every year thousands if not millions of Americans are taken advantage of by instant tax refund loans.

 

You know what I mean? Those places where they do your taxes for you and charge an obscene amount of of the percentage of your refund to cut you a check right then instead of waiting a few weeks to get a direct deposit?

 

(snip)

Curious to see if others see it the same...

I think there are certain jobs in society that certain people do...the leeches, the bottom suckers. The shady people.

It's not illegal, obviously, but it's icky.

(snip)

I feel much more strongly about socially acceptable and even glorified jobs that are inherently life negating, environmentally destructive, or encourage inhumanity...than I do about those that are obviously seedy and sucking off the desperate.

I don't think anyone is putting accountants and H&R block workers on the same level as loan sharks! :confused:

I was responding to Peela, and for clarities sake, I've included some of the op as well. Martha was speaking directly about offices (like H&R Block) that offer immediate refunds for a loan fee. Peela responded as quoted above. It appeared to me that, since she had not quoted anyone else, she was responding to Martha's op. If that's the case, then she was speaking about H&R block workers as "...the leeches, the bottom suckers. The shady people." Harsh words for people that are offering to someone's taxes and a "speedy refund."

[Cricket]

"Basically, I see it as wealthy business owners taking advantage of people who need immediate gratification, which is a huge problem in our society.":confused:

 

So you are blaming the wealthy for the woes of the people who can't, or won't, manage their own money?

 

Bottom line is there is a demand for these kinds of places, otherwise they would not be operating. People choose to go into them and get their money in advance, no one forces them. It is not legal loan sharking, it is a business, one that you may not agree with, but a business still. You are not going to get your legs broken or your thumbs put into a vice grip, you just pay a financial price for getting your money early.

 

If someone wants their money early, and is willing to fork over their money to do that, then so be it.

 

Instant gratification is a huge problem in our society, but it is not the fault of the check cashing operations, it is that fault of individuals.

 

:iagree: My in-laws have been in this business for over 40 years. They provide tax preparation services and accounting services. Some clients would rather get their money now than wait. They aren't desperate to pay bills. They want the money to buy something big or take a vacation. I'm not sure what interest they charge but they are simply providing a service that people want. Those people willingly take less money so they can have it now. Foolish, yes, but it is still their decision. No one is making them do it and they are aware of the difference in their refund before they decide.

 

Payday loans or car title loans are different places. I think those cater to desperate people. We've been in that position and used a car title loan. I hope to never be in that position again.

[amy g.]

My mother uses those kinds of loans. She is a teacher with a masters degree, great health insurance and no dependents. As far as I know, she has never been desperate. Neither has she ever learned the difference between wants and needs.

[Abigail4476]

...I was responding to Peela, and for clarities sake, I've included some of the op as well. Martha was speaking directly about offices (like H&R Block) that offer immediate refunds for a loan fee. Peela responded as quoted above. It appeared to me that, since she had not quoted anyone else, she was responding to Martha's op. If that's the case, then she was speaking about H&R block workers as "...the leeches, the bottom suckers. The shady people." Harsh words for people that are offering to someone's taxes and a "speedy refund."

 

Okay, I see. Thanks for the clarification. :) I agree, those are harsh words, if that's what she meant. My husband finally got an accountant after years of nagging (from me), and she is a godsend. At $150/hour, it's a pretty cheap trade-off if you save thousands in taxes.

[lionfamily1999]

Okay, I see. Thanks for the clarification. :) I agree, those are harsh words, if that's what she meant. My husband finally got an accountant after years of nagging (from me), and she is a godsend. At $150/hour, it's a pretty cheap trade-off if you save thousands in taxes.

Sure! And for many 10% or so is next to nothing when compared to a wait that could extend a few weeks. (not disagreeing, :lol:)

[klmama]

So while pondering the ever head scratching inducing opinions of my fellow humans on that thread...

 

It occurred to me that every year thousands if not millions of Americans are taken advantage of by instant tax refund loans.

 

You know what I mean? Those places where they do your taxes for you and charge an obscene amount of of the percentage of your refund to cut you a check right then instead of waiting a few weeks to get a direct deposit?

 

Every single person I now that does this says they are so "desperate" for the funds to pay bills or whatever that they cannot wait for the refund even it means they will have an additional several hundred dollars just by waiting a few weeks.

 

So is this an immoral business? Should good Christians refuse to work for these tax places? (it's considered a great seasonal job for many people)

 

I'm can't see how this is any different than buying something for a bargain off someone who says they are desperate to sell.

 

Curious to see if others see it the same...

 

I see it as a business that has figured out a way to increase its income by providing a wanted service to customers. I don't see it as immoral at all. Some people need that money to eat or pay bills immediately, and they are thankful for the service provided. The people who choose to use it because they want that plasma tv today understand what they are doing, too. It's their money, and it's their choice how they spend it. If they choose to exercise no self-control and have less money as a result, that's a problem they've brought on themselves. Again, I realize that some people really do need the cash right away, but most could wait a few weeks for the full amount - they just don't want to do so.

 

In fact, that decision not to exercise self-control with their money is the root of the entire problem from start to finish for most people. They are essentially giving the government an interest-free loan all year long so that they will get a refund of their own money at the end of the year - money they earned no interest on at all. Why not just adjust their number of deductions so they have less taken out of their paychecks all year? They could even have the difference direct-deposited into their savings account. They could save that money themselves, earn interest on it, and then buy the plasma tv when they have enough. There would be no waiting for the government to get involved and no loss of fees to the tax preparer for refunding a lesser amount of cash right away. If they still owe a little bit at tax time, they can pay that with money they've earned interest on all year long. The amount owed won't have changed, but the amount possessed will have increased. Yes, some people don't know they can do that, but many others just don't choose to do it because they don't want to practice self-control all year long. I think that's the sad part.

[vonfirmath]

In fact, that decision not to exercise self-control with their money is the root of the entire problem from start to finish for most people. They are essentially giving the government an interest-free loan all year long so that they will get a refund of their own money at the end of the year - money they earned no interest on at all. Why not just adjust their number of deductions so they have less taken out of their paychecks all year?

 

You can only adjust so far.

 

I prefer to get a tax return of under $500. It'd be fantastic to be within $100! But right now, we get NO taxes taken out of my paycheck and still get a refund at the end of the year. (not sure if we have taxes taken out of husband's. He's a TA at a university and doesn't have much in the way of options)

[Murphy101]

When persons of modest means promote and support policies that do terrible economic harm to themselves and certainly to other families in similar income brackets it is, to state it plainly, nonsense and sycophantic.

 

You could drive a Mack truck through the emotional ploys and bs based demonizing of making money in that book.

 

Also, I've already said, repeated in various other financial threads, that I actually do think reasonable regulation of market is necessary. The question here is not whether regulation is necessary; it is what is reasonable regulation.

 

I am most certainly of modest or even less than modest means and I am not promoting rapid refund anticipation loans bc I think it is a waste of personal funds. However, if other people want or need to waste their money? Yeah,

not my problem and certainly not something that should be illegal. People are

annoying stupid all the time. It isn't an illegal condition and most of the time it cannot be ethically and reasonably be protected against. For the other people, it's a matter of personal choices based on their situation. They are not being taken advantage of or misled. The only possible cruelty might

be that society in general doesn't really care about meeting their needs, so I wouldn't get to POd about a lending company marginally meeting the need.

 

I had no idea that accountants and H&R Block workers were so frowned upon.

 

Me either. Who knew. LOTS of accounting firms offer these options at tax

time.

 

They're illegal here now. Those title loans too (I believe), because they

had too many people that were unable to pay on payday and ended up owing far over what they had initially borrowed (in excess of 200%). People were losing shelter over pay day loans.

 

Hmm. It does look that way if you only look from the payday loan forward. The reality is their downward spiral toward loosing their shelter started way

before they took out the payday loan. I'd bet someone else's money (bc I'd never waste my own like that) that if they hadn't had the loan, they'd have lost their shelter anyways, possibly even sooner if the initial loan is what was keeping their head skimming the surface.

 

So now those of us who believe in fairness are dealing

in nonsense and sycophancy? ....yet those who promote class warfare are being honest? This is your argument?

 

What you are speaking for is a classic "us against them" mentality

I find it stunning that people are buying into this.

 

Yes, and it's not like you and I always agree on issues of finances either.

 

This demonizing people just bc they make money is nonsense. This ridiculous view that all poor people or even middle class are so ignorant, stupid, lazy, or whatever that they literally need govt to protect from their own stupidity is nonsense. Not to mention mighty insulting to a large portion of our society!

 

People need to read Animal Farm again.

 

Along the same vein, an aquaintance of mine was telling me how instead of sending his kid to college he was considering opening a payday loan business with his kid.

 

My answer was "if you could live with yourselves."

 

Wow. Not only do you discourage starting a business, you presume he will run

it unethically? Lots of people making minimum wage jobs sometimes can't wait until the next payday for many reasons. But to heck with them and double heck to those giving them a loan?

 

I think I would see the payday and title loan places as sort of sleezy operations but then I think the people who go to them are not usually the most upstanding citizens either. I think these places tend to cater to people living on the margins- some of whom are there with

unfortunate circumstances but almost all who are there because of poor

lifestyle choices-gambling, drugs, alcoholism, etc.

 

Oh wow. We went straight from demonizing wealthy to denigrating poor people. For your information, that's actually very much butt backwards. It is

no where near almost all drug and gambling addicts! Most are average joe law-abiding citizens working low income jobs struggling to make it payday to

payday. Tho I've already said it varies from state to state, most payday loans obviously involve working people who are trying to contribute legally to society. They could probably make more money easier illegally if

they are into drugs and gambling.

 

My state doesn't allow title loans. Mostly because old people were loosing

their homes. No one seems to give a flip when a white middle aged man looses his home, that's just his own dumb fault. But heaven forbid a senior citizen be accused of bad judgement. And no, they aren't all senile either.

Seniors can be just as crooked, sexually deviant, addicted, lazy or abusive as anyone else. It's not like people get angel wings the day they turn retirement age. But THAT is yet another thread.:D

 

I'm not seeing why regulated payday and rapid refund anticipation loans are any worse than any other debt option. For the most part, I'm anti-debt in philosophy. Experience being a wicked good teacher. But way back in the day, we truely did need that rapid refund (twice over a decade ago) or payday or personal loan (a few times over 18 month period, again over a decade ago). I assure you, we have never had any addictions (well aside from my books and dh's diet pepsi) or gambled in my life. I freely admit we've made financial

mistakes over the years. Not sure anyone hasn't! Apparently making financial mistakes is only okay if you are bailed out by the govt. The average citizen who gets a bit too much debt banking on health and a job to see them through? To heck with them. Business that might help some of them make it another payday? To heck with them too. Double heck if they actually make

money doing it.:confused:

 

The truth is low income people have very few choices comparatively speaking. Every. Single. Dang. Thing. Is harder.

 

When my kids gripe about why I push them so hard and talk about money so much, I explain that money does not make people happy. The value of money is that if gives the freedom to make choices that people either don't have or have an incredibly hard to achieving.

 

I worked at a tax prep office in the city for

several years a long time ago. They offered loans for tax refunds.

 

The vast majority of people who are getting these loans are not getting back money they themselves paid in. They are getting EIC, refundable credits, etc. So they don't see it as giving up any of their own money to get the money sooner. They are just getting a bit less "free money" from the government ($2450 instead of $2600, for example.) I think that is a huge part of why they don't bat an eye at the cost.

 

I was shocked the first few times I told people how much it would cost to get the loan and they still did it, but evertually the shock wore off. Every time, I would explain how they could get their EIC in their weekly paycheck and use it to pay bills all year long. :confused: It did no good. Eventually I quit,

because seeing the people (and mostly their poor dc) and dealing with their abuse took a huge toll on me emotionally each year. It paid very well, but it

wasn't worth the stress.

 

Hmm. I don't know anyone who views it as free money. Possible. Just saying not my experience. We have never wanted the EIC in paychecks. It's too small an addition every two weeks to make a difference in what monthly bills we could pay. The refund, when we got it, was viewed as a surprise savings account. I do know that many people do that. Every year it's a topic of conversation on this very board. Got refund? What curriculum are buying with it for next year? Some of my favorite threads, curriculum junky that I am.:D

 

I have no idea what you mean by abuse. If you were rude or condescending bc they weren't making financial decisions you felt best for them, yeah bet that

went over like a lead balloon with your clients. Otherwise, most are so happy over getting their refund they are pretty darn cheerful and nice.:001_huh:

 

I should have put "desperate" in quotes. I have so many feelings about this that are hard to articulate with puking kids in the house. Basically, I see it as wealthy business owners taking advantage of people who need immediate gratification, which is a huge problem in our

society. Most people CAN afford to wait the short period of time for that direct

deposit, but just cannot deprive themselves of that Plasma TV for another day, or in the case of a single mother I know, a new pair of boobs.

 

Wow. Do you feel the same about fast food, ice cream, computers... Good grief the list of sources that make money by making life easier, faster, and instantly gratifying could get quite long indeed! Again, where is personal responsibility here?

 

Oh no! Don't you dare suggest Netflix should be illegal for getting rich off my subscription bc I like the instant gratification of streaming! I love my Netflix!:D

 

Since there is demand for this sort of 'service,' it seems to me that too many don't understand how this sort of practice destroys their ability to build any wealth or stay out of desperate situations...:confused1:

 

I disagree. I think they do know and either just no longer care or believe that

ever getting ahead is not really possible. It's rather sad and annoying at the same time. :(

Edited December 18, 2010 by Martha

[lionfamily1999]

Hmm. It does look that way if you only look from the payday loan forward. The reality is their downward spiral toward loosing their shelter started way

before they took out the payday loan. I'd bet someone else's money (bc I'd never waste my own like that) that if they hadn't had the loan, they'd have lost their shelter anyways, possibly even sooner if the initial loan is what was keeping their head skimming the surface.

 

 

I disagree. I think they do know and either just no longer care or believe that

ever getting ahead is not really possible. It's rather sad and annoying at the same time. :(

We were in a similar situation, EXCEPT (and thank God for this) we were indebted to family members. Every week as we paid off our debts we ended up without enough money to make it to the next pay day. It took us way too long to get out of that cycle. Was it the result of bad financial decisions, I'm sure, but I couldn't point out one single incident. It was a matter of getting in over our heads, not realizing that (for instance) our car bill would be doubled by the insurance bill. Not realizing that our budget was only good if we were actually able to keep things (like food and gas) into their slim parameters.

 

I feel so horrible for people that get into that situation, ESPECIALLY with pay day/title loan companies. My family did not mean to put us into a cycle of debt, they wanted to help us. These companies profit by creating a cycle of debt. Not one that actually sinks the borrower (or at least they shouldn't, but it looks like most major banks forgot this key point), but enough to keep them as repeat customers.

 

I also understand the idea of giving up on getting ahead. Dh and I used to stress like crazy, because we can't save up six months of income. Well, we gave up and our lives are more relaxed for it. We lived through losing everything, without any real savings, still managed to keep on keeping on and now we know that it's hard, but possible to do. :shrug:

 

I'm sure that David Ramsey has a cure for that :lol:, but I've never put much stock in someone who doesn't even know me believing they can fix my problems. So, I won't read his book (who wants to spend the money on the book :lol:) and we'll continue paycheck to paycheck. Don't be annoyed with us, we're okay ;) We just have our priorities and having me work so we can get ahead financially is not one of them. In the mean time, we're nearly debt free and when we have to we can cut back even further. I love my instant gratification Netflix though, not worth losing it for $9 a month in savings.

[klmama]

You can only adjust so far.

 

I prefer to get a tax return of under $500. It'd be fantastic to be within $100! But right now, we get NO taxes taken out of my paycheck and still get a refund at the end of the year. (not sure if we have taxes taken out of husband's. He's a TA at a university and doesn't have much in the way of options)

 

I'm sure if he asked the secretary of his department for help, he/she would be able to get him signed up for withholding levels that are more appropriate for your family. I know my dh had to adjust his several times until it was about right, but it was well worth the effort.

[lionfamily1999]

I'm sure if he asked the secretary of his department for help, he/she would be able to get him signed up for withholding levels that are more appropriate for your family. I know my dh had to adjust his several times until it was about right, but it was well worth the effort.

We're always worried we'll get it "fixed" and that year our tax rates will change :glare: