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Certainly, none of those people deserve to be taken advantage of like that. But, for those who are willing to pay 150$ interest on a two-week 500$ loan, they'v

Certainly, none of those people deserve to be taken advantage of like that. But, for those who are willing to pay 150$ interest on a two-week 500$ loan, they've got even bigger problems. In a world where money is everything, people must learn how to use it. Basic Personal finance should be taught k-12 as a primary subject, it's far more important than anything else you could possibly learn.

deleted 9y ago
[deleted]
mrkurt 9y ago
Predatory loans can't really be solved with education, at least not a simple "personal finance" course. People don't get loans like that because they're dumb, they get loans like that because they're stuck and desperate: https://www.economist.com/news/united-states/21663262-why-low-income-americans-often-have-pay-more-its-expensive-be-poor https://www.economist.com/news/united-states/21663262-why-lo...
- wyager 9y ago
  I hear this a lot, but everyone I know who had debt trouble did so because they made a dumb purchase (or 20) with debt, not because they had no other options. I have trouble believing the maximally charitable explanation.
  - CocaKoala 9y ago
    None of the people I know are in massive debt, therefore I have trouble believing that anybody is in massive debt. Does that sound like a reasonable assertion?
- craftyguy 9y ago
  Understanding personal finance would give people the tools to help avoid becoming stuck and desperate in the first place (obviously not in every case)
  - mrkurt 9y ago
    Most of the predatory lending industry is built on top of people who are born stuck and desperate.
    - craftyguy 9y ago
      Well not knowing how to manage your own finances is one sure way to guarantee that everyone "born stuck and desparate" will stay there indefinitely! But hey, might as well give no one the tools to help their situation if it won't help everyone all at once, right?
- dazc 9y ago
  '...they get loans like that because they're stuck and desperate. In the UK we have what's known as 'doorstep lenders' who offer these kinds of extortionate loans to people who are on benefits (welfare) and who can not get credit by any other means. It is fashionable to sneer at their victims as irresponsible and feckless but these companies have spent years perfecting a methodology that is difficult to resist. If you're living hand to mouth and someone offers you a cash loan of £500 there and then it can take a lot of self-control to pass. A friend of mine has mental health issues and has a real problem with the word 'no'. As a consequence he's found himself a target of these people on numerous occasions.
  - wpietri 9y ago
    Yes. I know bright, competent people with PhDs who have fallen victim to professional scammers. Education does not solve the problem. Scammers make use of information and power asymmetries, ruthlessly exploiting weaknesses. I guess in theory we could educate every single person on every single scam and give them all enough regular practice in spotting and dodging scammers. But it's far, far cheaper to just vigorously enforce the laws we have, and to update the laws as needed.
  - eropple 9y ago
    It is the common and, for some, so very morally upright, to castigate people for not being proof against practiced, refined methods specifically designed to take advantage of them. Payday lending in the US or doorstep lending in the UK is exactly that. These people are practiced. They have built strategies on exactly how to get the most out of disadvantaged people: the poor with payday lenders, addictive personalities with casinos or mobile games, all of it. They have bigger guns and much, much more data about how to aim--but John Q. Public is supposed to be able to ward all of it off? Here's an example. Here in Massachusetts we're plagued with scumbags who want you to sign up for an "alternative energy provider" or whatever. Still uses your normal electric company but they "source the power" from a company you select. "It's green," they cry! "It's cheaper," they cry! Of course, what they don't tell you, as they literally knock on your door and fast-talk you, as they imply-but-don't-say that they're from your actual power company, into signing up. Then they jack your rates a few months later, expecting you to not notice, because the bill comes from National Grid anyway. And there's also a big cancellation fee after 48 hours, too, so they get you that way too. The reason I know about these bastards is because one day, a little confused, a little hungover, and not wanting to look stupid, I got suckered by these assholes. Some dude knocked on my door, was super duper friendly, and explained his upsides and not his downsides; sure, this sounds fine, I'll sign up. Was it stupid? Yeah, it really was. But hey, I messed up. It happens to everyone. For me, the risk is pretty small. It would've been twenty, forty, sixty bucks extra a month. But I'm in tech! I might not have noticed. What about the barely-speaks-English immigrant who lives two doors away from me and works at the 7-Eleven down the street? What about the elderly people in my building? They're not gonna know what happened, they might not even remember doing it by the time it goes down. I'm in a more privileged place than most people, in that I'm comfortable with legalese and how to operate with regards to contracts and that sort of thing. So, after the high-pressure sales were no longer clogging my brain, I was able to go "wait, what did I just agree to?". I read the papers left to me, went "this is awful" and "wow, fuck those guys" respectively, canceled it within the cancel window, and called my state senator saying "hey, this is totally bad up, you need to do something about it". I did, what's it called--civic engagement, something that actually still works in Massachusetts. And his office is on it, they've co-sponsored a bill to give the state AG authority to deal with these scams, and I called my rep and rep-at-large afterwards to make sure that they're aware of it and are going to vote for the bill. But it's not just civic engagement, it's community engagement: ever since, because I am fortunate and I can do it safely because I'm a pretty tall, pretty broad white dude who has no reason to be intimidated by these people and knows the rules they have to operate under, any time they come in the building and I'm around, I make sure they leave, or I call the cops. This is not something solved merely by education. This is something solved by the communities in which we all live grabbing the metaphorical torches and keeping the wolves at bay rather than letting them take the weak. Not allowing wolves to eat the least of us is why we invented society in the first place, isn't it?
eropple 9y ago
It is very easy for us to say one should be unwilling to take those terms. And they are unwise terms. When you have, or can see, no other options aside from "your kid starves", perhaps they are suddenly less unwise. Desperation exists and it is not solved with personal finance courses.
- pascalxus 9y ago
  personally, I would fast for the long term before I took on terms like that. Fasting is actually quite good for your health and many of us would benefit from it. in the US with frugal living, you live of 2-3$ per day, using the oatmeal plan. And, if your so poor you can't afford that, then it's irresponsible to have kids. At least not until you get back on your feet.
  - dazc 9y ago
    I wonder what's the longest period of time you've ever fasted for? Many years ago I was homeless and broke for a period of time. At one point I didn't eat for 2 days, it wasn't easy and not something I'd be willing to do again voluntarily. 2 days sounds easy, right?
    - Consultant32452 9y ago
      I've fasted for 3 days. Day 1 was kinda rough, day 2 was easier imo. Day 3 was the easiest of the 3 days. That said, I fasted from a place of luxury. Not eating because you literally have no food available is a completely different psychological experience.
    - maxxxxx 9y ago
      Fasting for even a week is no problem when you have been well fed before. It's not so much fun and not so healthy when you are already underfed or malnourished when you start. Recommending fasting to poor people is pretty arrogant.
  - s73ver_ 9y ago
    "And, if your so poor you can't afford that, then it's irresponsible to have kids." Hindsight is 20/20. What do you do if you already have kids?
tribune 9y ago
Freakonomics did an interesting episode on this http://freakonomics.com/podcast/payday-loans/ http://freakonomics.com/podcast/payday-loans/
tarsinge 9y ago
Couldn't we have something like the "Accredited investor" concept for a certain class of loan? E.g. if interests are above a certain rate? I can't buy certain financial products even if I'm educated because I'm not an accredited investor, but anybody can lose more than what they have freely.
ajross 9y ago
So... "Only the sophisticated need protection from scams. The rubes deserve what they get." ... ? That's pretty vile. Yeah, the world is filled with people with poor finance skills. They aren't marks to be exploited.
s73ver_ 9y ago
Your car breaks down. You have absolutely zero money in savings; you work two jobs to pay rent and put food in your children's belly and clothes on their backs. You absolutely must have your car in order to get to your jobs; public transit in most areas is spotty at best. You cannot get a loan any other way, and you need money now. What do you do?
- gjjrfcbugxbhf 9y ago
  Don't be in that situation. No seriously. I even went so far as emigrating and moving to a country with a better welfare state partly to avoid this ever happening. Not everyone has the luxury of being able to move countries+. Which is why we should all vote and lobby for better welfare systems - so that we and our loved ones never have to take these types of decisions. Edit + It usually takes marketable skills that allow a well paid job such that welfare doesn't seem like a priority. Edit Would down voters care to chip in with a comment? Drive bys don't really lead to good discussion.
  - s73ver_ 9y ago
    "Don't be in that situation." That is not an answer. If you are actually trying to discuss in good faith, then please respond to the topic at hand. Playing Captain Hindsight helps absolutely no one, especially the people in the situation, and really just serves as "I'm better than you!" I absolutely agree that better welfare systems would be excellent, and would alleviate these problems quite a bit. But here in the US, that is not going to happen anytime soon. In fact, given the government in power now, I would expect the welfare system to get even worse. So please, do not offer "Don't be in that situation" as a suggestion.
    - michaelmrose 9y ago
      "Which is why we should all vote and lobby for better welfare systems - so that we and our loved ones never have to take these types of decisions." Pretty sure that is an answer even if its one that is unlikely to work for America this decade.
    - 9y ago

deleted 9y ago

[deleted]

mrkurt 9y ago

Predatory loans can't really be solved with education, at least not a simple "personal finance" course. People don't get loans like that because they're dumb, they get loans like that because they're stuck and desperate: https://www.economist.com/news/united-states/21663262-why-low-income-americans-often-have-pay-more-its-expensive-be-poor https://www.economist.com/news/united-states/21663262-why-lo...

wyager 9y ago
I hear this a lot, but everyone I know who had debt trouble did so because they made a dumb purchase (or 20) with debt, not because they had no other options. I have trouble believing the maximally charitable explanation.
- CocaKoala 9y ago
  None of the people I know are in massive debt, therefore I have trouble believing that anybody is in massive debt. Does that sound like a reasonable assertion?
craftyguy 9y ago
Understanding personal finance would give people the tools to help avoid becoming stuck and desperate in the first place (obviously not in every case)
- mrkurt 9y ago
  Most of the predatory lending industry is built on top of people who are born stuck and desperate.
  - craftyguy 9y ago
    Well not knowing how to manage your own finances is one sure way to guarantee that everyone "born stuck and desparate" will stay there indefinitely! But hey, might as well give no one the tools to help their situation if it won't help everyone all at once, right?
dazc 9y ago
'...they get loans like that because they're stuck and desperate. In the UK we have what's known as 'doorstep lenders' who offer these kinds of extortionate loans to people who are on benefits (welfare) and who can not get credit by any other means. It is fashionable to sneer at their victims as irresponsible and feckless but these companies have spent years perfecting a methodology that is difficult to resist. If you're living hand to mouth and someone offers you a cash loan of £500 there and then it can take a lot of self-control to pass. A friend of mine has mental health issues and has a real problem with the word 'no'. As a consequence he's found himself a target of these people on numerous occasions.
- wpietri 9y ago
  Yes. I know bright, competent people with PhDs who have fallen victim to professional scammers. Education does not solve the problem. Scammers make use of information and power asymmetries, ruthlessly exploiting weaknesses. I guess in theory we could educate every single person on every single scam and give them all enough regular practice in spotting and dodging scammers. But it's far, far cheaper to just vigorously enforce the laws we have, and to update the laws as needed.
- eropple 9y ago
  It is the common and, for some, so very morally upright, to castigate people for not being proof against practiced, refined methods specifically designed to take advantage of them. Payday lending in the US or doorstep lending in the UK is exactly that. These people are practiced. They have built strategies on exactly how to get the most out of disadvantaged people: the poor with payday lenders, addictive personalities with casinos or mobile games, all of it. They have bigger guns and much, much more data about how to aim--but John Q. Public is supposed to be able to ward all of it off? Here's an example. Here in Massachusetts we're plagued with scumbags who want you to sign up for an "alternative energy provider" or whatever. Still uses your normal electric company but they "source the power" from a company you select. "It's green," they cry! "It's cheaper," they cry! Of course, what they don't tell you, as they literally knock on your door and fast-talk you, as they imply-but-don't-say that they're from your actual power company, into signing up. Then they jack your rates a few months later, expecting you to not notice, because the bill comes from National Grid anyway. And there's also a big cancellation fee after 48 hours, too, so they get you that way too. The reason I know about these bastards is because one day, a little confused, a little hungover, and not wanting to look stupid, I got suckered by these assholes. Some dude knocked on my door, was super duper friendly, and explained his upsides and not his downsides; sure, this sounds fine, I'll sign up. Was it stupid? Yeah, it really was. But hey, I messed up. It happens to everyone. For me, the risk is pretty small. It would've been twenty, forty, sixty bucks extra a month. But I'm in tech! I might not have noticed. What about the barely-speaks-English immigrant who lives two doors away from me and works at the 7-Eleven down the street? What about the elderly people in my building? They're not gonna know what happened, they might not even remember doing it by the time it goes down. I'm in a more privileged place than most people, in that I'm comfortable with legalese and how to operate with regards to contracts and that sort of thing. So, after the high-pressure sales were no longer clogging my brain, I was able to go "wait, what did I just agree to?". I read the papers left to me, went "this is awful" and "wow, fuck those guys" respectively, canceled it within the cancel window, and called my state senator saying "hey, this is totally bad up, you need to do something about it". I did, what's it called--civic engagement, something that actually still works in Massachusetts. And his office is on it, they've co-sponsored a bill to give the state AG authority to deal with these scams, and I called my rep and rep-at-large afterwards to make sure that they're aware of it and are going to vote for the bill. But it's not just civic engagement, it's community engagement: ever since, because I am fortunate and I can do it safely because I'm a pretty tall, pretty broad white dude who has no reason to be intimidated by these people and knows the rules they have to operate under, any time they come in the building and I'm around, I make sure they leave, or I call the cops. This is not something solved merely by education. This is something solved by the communities in which we all live grabbing the metaphorical torches and keeping the wolves at bay rather than letting them take the weak. Not allowing wolves to eat the least of us is why we invented society in the first place, isn't it?

eropple 9y ago

It is very easy for us to say one should be unwilling to take those terms. And they are unwise terms. When you have, or can see, no other options aside from "your kid starves", perhaps they are suddenly less unwise. Desperation exists and it is not solved with personal finance courses.

pascalxus 9y ago
personally, I would fast for the long term before I took on terms like that. Fasting is actually quite good for your health and many of us would benefit from it. in the US with frugal living, you live of 2-3$ per day, using the oatmeal plan. And, if your so poor you can't afford that, then it's irresponsible to have kids. At least not until you get back on your feet.
- dazc 9y ago
  I wonder what's the longest period of time you've ever fasted for? Many years ago I was homeless and broke for a period of time. At one point I didn't eat for 2 days, it wasn't easy and not something I'd be willing to do again voluntarily. 2 days sounds easy, right?
  - Consultant32452 9y ago
    I've fasted for 3 days. Day 1 was kinda rough, day 2 was easier imo. Day 3 was the easiest of the 3 days. That said, I fasted from a place of luxury. Not eating because you literally have no food available is a completely different psychological experience.
  - maxxxxx 9y ago
    Fasting for even a week is no problem when you have been well fed before. It's not so much fun and not so healthy when you are already underfed or malnourished when you start. Recommending fasting to poor people is pretty arrogant.
- s73ver_ 9y ago
  "And, if your so poor you can't afford that, then it's irresponsible to have kids." Hindsight is 20/20. What do you do if you already have kids?

tribune 9y ago

Freakonomics did an interesting episode on this http://freakonomics.com/podcast/payday-loans/ http://freakonomics.com/podcast/payday-loans/

tarsinge 9y ago

Couldn't we have something like the "Accredited investor" concept for a certain class of loan? E.g. if interests are above a certain rate? I can't buy certain financial products even if I'm educated because I'm not an accredited investor, but anybody can lose more than what they have freely.

ajross 9y ago

So... "Only the sophisticated need protection from scams. The rubes deserve what they get." ... ? That's pretty vile. Yeah, the world is filled with people with poor finance skills. They aren't marks to be exploited.

s73ver_ 9y ago

Your car breaks down. You have absolutely zero money in savings; you work two jobs to pay rent and put food in your children's belly and clothes on their backs. You absolutely must have your car in order to get to your jobs; public transit in most areas is spotty at best. You cannot get a loan any other way, and you need money now. What do you do?

gjjrfcbugxbhf 9y ago
Don't be in that situation. No seriously. I even went so far as emigrating and moving to a country with a better welfare state partly to avoid this ever happening. Not everyone has the luxury of being able to move countries+. Which is why we should all vote and lobby for better welfare systems - so that we and our loved ones never have to take these types of decisions. Edit + It usually takes marketable skills that allow a well paid job such that welfare doesn't seem like a priority. Edit Would down voters care to chip in with a comment? Drive bys don't really lead to good discussion.
- s73ver_ 9y ago
  "Don't be in that situation." That is not an answer. If you are actually trying to discuss in good faith, then please respond to the topic at hand. Playing Captain Hindsight helps absolutely no one, especially the people in the situation, and really just serves as "I'm better than you!" I absolutely agree that better welfare systems would be excellent, and would alleviate these problems quite a bit. But here in the US, that is not going to happen anytime soon. In fact, given the government in power now, I would expect the welfare system to get even worse. So please, do not offer "Don't be in that situation" as a suggestion.
  - michaelmrose 9y ago
    "Which is why we should all vote and lobby for better welfare systems - so that we and our loved ones never have to take these types of decisions." Pretty sure that is an answer even if its one that is unlikely to work for America this decade.
  - 9y ago