Here’s an article that talks about the efforts that are underway to protect some of the lowest income members of our society. Around 10 million people opted to pay extra to get a “refund-anticipation loan” so that they could get access to their tax refunds early. Many of these people just don’t understand enough about money to realize how screwed they are getting:
Challenges mount against refund-anticipation loans
Oh come on…. I use payday loans all the time. They are great.
I can’t see that this is particularly “evil” – the people getting these loans are absolutely hopeless with money, and therefore a high risk, so a $100+ fee seems quite modest.
The article’s has a good example – the customer took out the loan without realising a) that she was getting a loan (what, she thought it was a gift?), b) that she had previously been overpaid a refund (what did she do with the extra $1000+ she got overpaid last year?), and was therefore not entitled to get any refund this year!
I think it’s funny that she’s so hopeless with her money, but is part of a class lawsuit against her tax preparer!
Is it always evil to loan money to careless or ignorant people, or just in this instance?