Money Lending (Money Mart, Payday Loans, Cheques Cashed, etc)

[Weapon_R]

Has anyone ever used these services?

Im interested in finding out how they work. How does the company determine whether you qualify for a loan? How do they collect their money? What happens when a borrower doesn't pay? And lastly, how can they verify a legitimate cheque?

[Redlyne_mr2]

Theyre pretty much for people with bad credit..so bad that they cant even get bank account. They charge huge interest on loans and charge quite a high price to cash a cheque. Their collections process is simple, in the morning all the reps make collection calls on delinquent accounts, in the afternoons they do loans. If the debtor doesnt pay they cant do much but trash his already trashed credit. If the debtor has offered collateral then they can seize the collateral. I think for cheques they require you to fill out a "membership", I dont know the specifics but they take down as much personal info as they can.

[kaput]

.

[max_boost]

^^^

There was an article in the Calgary Sun not too long ago that addressed the issue.

I can't remember it's exact details but companies can't charge a rate higher than a specific %, I think it was 40% or something. To get around it, these companies charge a 'service fee' or something.

To sum it up, you borrow $500, you pay back $1500, it was just ridiculous.

I guess if you are desperate, you just have to bite the bullet!

[AcuraTl]

basically i think they check ID and verify that you will be getting a check...then for example they lend you 100 dollars and get a promise from you to get 120 in two weeks (when your next check is) so thats like 20 percent interest? so the day comes and you miss your date to pay. Then they charge you megga interest...i think you can even 'like' about your job. It doesent matter if you dont pay them back, they will take ur ass to court!

[pr0]

I went there (money mart) a few weeks ago for the first time to cash 3 money orders. The woman down there was like "Where the heck did you get all of these?" and made sure it wasn't fake and took like half an hour to cash and questioned me like crazy (where are these from?, do you have their phone number?, etc). The value of each money order was like 20 dollars...

I am never going there again. First and last time.

[350]

i cant imagine taking out a lone with these guys. my buddy took out a 300 dollar lone with them to pay his cell bill and he paid them back 337 or something like that after a week!

[HRD2PLZ]

I used to know someone who worked at a MoneyMart and he said they basically were supposed to verify whatever they could, but so many times they would get screwed over by people giving bad cheques, etc. I think for a lot of them to borrow an amount, you have to write them a cheque for that amount plus whatever service fee's etc and on the agreed upon date MoneyMart would cash the cheque

[Xtrema]

It's actually pretty fair. The high interest is for covering other delinquent borrowers. For example, if 1 in 5 bounces, you pretty much have to charge 25% for the other 4 accounts to cover the 5th.

It's bascially for people with REALLY bad credit history (heck, if you can't get a credit card, it's bad) and for people to cash questionable money orders. That's why they ask all the questions, Pr0. I have been screwed by fake MO is the past and cash a lot of wierd ones thru MM (back in the days where no ID required). But now all my transition is via Paypal.

[Weapon_R]

I honestly have a fascination with these companies. It's a given that they deal with people who have poor employment history, terrible credit, etc. It would be interesting to find out how they manage to cover their losses with the amount of false information that arrives. Yet most of them seem to survive very well, even with this high rate of losses...

I'd love to hear from someone within the company. Is it really worth initiating a court date for someone over $120? Do these companies even do that? It wouldn't even make sense for them to call a collection agency since these guys have no reason to worry about their credit. Cashing money orders/cheques I can understand (they charge 2.5% on each transaction) but how do they loan larger amounts...

Good points above though.

[sputnik]

I believe Zahir Rana (ZR Auto) owns quite a few of these places along with a number of pawn shops.

[Xtrema]

Any business is good if you can do it in volume. In the end, they do make pretty good profit with a certain amount of safeguard in place.

And we are not talking about anyone can walk in and get $2-$3K in loans. They probably won't exceed $1000.

[AcuraTl]

Originally posted by Weapon_R
I honestly have a fascination with these companies. It's a given that they deal with people who have poor employment history, terrible credit, etc. It would be interesting to find out how they manage to cover their losses with the amount of false information that arrives. Yet most of them seem to survive very well, even with this high rate of losses...

I'd love to hear from someone within the company. Is it really worth initiating a court date for someone over $120? Do these companies even do that? It wouldn't even make sense for them to call a collection agency since these guys have no reason to worry about their credit. Cashing money orders/cheques I can understand (they charge 2.5% on each transaction) but how do they loan larger amounts...

Good points above though.

in the states it is COMMON practise to initiate court suits over even say a 100 dollars, the companies usually win four or five times what they are owed + court costs...

[pr0]

To verify if the cheque is legit, what they do is call the person (so you need to provide them with the phone number) who gave you the cheque and after that, they call the bank and do a bunch of other BS that takes a half hour. You then walk out with cash minus 2.50 per cheque/money order. Waste of money in my opinion, that 2.50 adds up and its not worth my time waiting there for the crappy 54 bucks I got.