I love a good success story.
I have been reading about a businessman recently. I’ll call him Mark.
Mark is a hard worker. He started his business in 2006 with one store and today has over a thousand stores in 21 states.
His bio indicates that he is a family man, a triathlete, hunts for big game in Alaska, and has climbed Mount Kilimanjaro. He is a man of the world, fortunate to utilize his wealth to provide for his family and meet his desires to accomplish things most people only dream of.
He graduated from a prestigious university, attends Church faithfully, and pays his taxes. One might consider him a model citizen.
Certainly, he holds his head high among his peers and garners recognition in his community as a successful business man. Very successful.
I am fascinated by his story. Why, you might ask?
Well, I happen to be acquainted with one of his customers. I’ll call her Amy.
Amy is also a hard worker. She is no entrepreneur though, often working 80 hours per week to make ends meet. Yes, 80. Yes, per week.
Amy is not wealthy but also attends Church faithfully, and she thanks the Lord for what she has. She is, in my opinion, the salt of the earth – the type of person whose hard work and perseverance make our world a better place.
I am especially sad lately because Amy has cancer.
True to form, she has faced the battle with dignity. She has struggled, also with her head held high, to continue to work and to pay for costly chemo and radiation treatments and the impending surgery to attempt to remove the tumor.
I have followed Amy’s progress closely, so when she entered my office with grim resignation on her face last week, I braced for news that the treatments had stopped working.
Instead, I was surprised to find her seeking financial advice as opposed to updating me on her health struggles. I was amazed at what unfolded as I began to piece together her predicament.
Amy had gotten trapped in a spiraling struggle financially. She was working less hours due to her illness which, of course, resulted in smaller checks. As her medical needs increased, those expenses climbed, requiring a larger portion of her shrinking paychecks. In a moment of despair, she sought help from a title lending company and in minutes received some much needed cash in exchange for paperwork committing her to make monthly payments for principal and interest.
Unfortunately, after making her first month’s payment, she failed to make the second and found her car had been towed and impounded. In an effort to understand exactly what happened, she and I called the title lending company together, and she granted them permission to speak with me.
What followed, although relatively simple to understand, was completely mind boggling to me. Amy had collateralized her car for about a quarter of its value. Interest rate: 286%.
The agent quickly pointed out that this rate was discounted 50% on the first payment – I tried to contain my excitement.
Seriously, Tony Soprano could only dream of getting such rates. He should consider a franchise and start earning more money legally.
Unfortunately, that is the point – it is totally legal. That was my first question after hearing the rate – “How is that legal?”
The response was simply, “ask the State of Tennessee.”
Since Amy failed to make the second payment, her car was impounded while she slept and stored in their lot where it would remain for a period of time before being sold at auction.
The only way she could get her car back would be to pay the total original amount borrowed plus the 286% interest, plus a $400 repo fee, plus a daily storage fee which they offered to reduce because they “know Amy’s medical situation and care about helping her out.”
How generous. My dumbfounded silence prompted the agent to make an additional statement. “I know it sounds bad, but at the end of the day, it is an adult decision.”
I asked if there was nothing that could be done to help reduce the fees, given the truly precarious situation Amy was in, and the agent agreed to check with her boss and get back with me.
The next day, they informed Amy that they would not speak to me anymore but that they had reduced her charge by $600 – essentially the repo fee and storage fees – but she would still have to pay the 286% interest and the original principal on the loan. A huge profit for them, much of which will go into the pocket of, you guessed it, Mark, the upstanding citizen. While Amy wages her battle for life, this money will help fund Mark’s next trophy hunt, except the portion duly set aside for his lobbyists, of course.
This situation confounds me. A pharmaceutical executive gouging Amy’s finances with a 286% increase in chemo costs would be excoriated in news and social media while the owners of predatory lending agencies shake hands with our lawmakers at fundraising galas, invest ever so wisely in their political campaigns, and get a free pass to swindle the desperate while posturing at church as community-oriented businessmen.
So, like I said, I love a good success story. Who is the success here? Amy or Mark? I have an opinion but I’ll let you decide.
© Michael L. Collins