Payday Users Share Their Experiences

Part three of a series on payday lending, tells the stories of three individuals and their experience using payday loans.

Roger Harris – Disabled Veteran

When Roger Harris walked into the Advance America payday loan center in the early summer of 2008 all he wanted was a small amount of money for his bills.

He ended up with a financial headache, what he calls harassment and the loss of his checking account.

Harris is a disabled veteran who lives in Woonsocket.  He was injured in a car crash 17 years ago when his car skidded off the road on a patch of black ice.  He uses a wheelchair to get around.

At the time, Harris lived on $845 per month in the form of Social Security Disability Income.  He used this money to buy his food and pay rent, and rarely had a little to spare.  So when his money was running low at the end of the month and he hadn’t paid his bills, Harris decided to take out a $300 short-term payday loan to cover his expenses until his SSDI check came in.

At the payday center he was told he would have to pay them back $340 for the $300 loan in 13 days. Harris gave them a post-dated check, which they said they would cash after 13 days.

During that time Harris had to pay his rent and buy food, leaving him only $100 to pay back to the payday center after 13 days. He said he went to the center and explained his ordeal. He gave them the $100 and told them not to cash the post-dated check because there was no money in his account.

A week later, they cashed the check and it bounced.  Harris was charged with a $25 insufficient funds fee, $35 overdraft fee and a $33 returned check fee. 

After the check bounced, Harris says the harassment began. Harris couldn’t afford to pay them more of the loan back because the bank took its fees directly from his account when his disability check came, leaving him only with enough to pay for rent. Once or twice a week a lady from the payday loan place would knock on his door at his apartment building at 7 a.m.  If he wasn’t there she would leave an orange sign on his door that said “We were here.”  They would call every other day, leading Harris to stop answering the phone.

Another month went by and Harris still couldn’t pay the loan back.  The payday loan place tried cashing his postdated check again and it bounced again.  This resulted in more fees, eventually totaling $245. Harris couldn’t afford the fees and had to close his checking account.  He now uses only a savings account.  Because of this, each time he gets a check he has to travel to the bank in order to be able to use the money.

Harris eventually paid back the loan in the Winter of 2008. 

“When I got the loan, I was at least able to pay off a couple bills,” said Harris, “In the end, it’s not worth it, I discourage people from going there.” 

He said the whole experience made him feel terrible.

Kimberly Manchester – Pleasant Payday Experience

Kimberly Manchester, of Cranston, found her experience with payday loans to be satisfactory enough that she shared it in the comment section on Cranston Patch.

She said a few years back she was on workers’ compensation and decided to take out a small payday loan from Check ‘n’ Go a couple of times.

“The people were consummate professionals, explaining the fee structure clearly and truthfully, which is more than I have gotten from banks and credit card companies trying to sell me ‘free’ overdraft protection or credit limit increases,” Manchester wrote.

Manchester added that the people at Check ‘n’ Go informed her of exactly how much was due and when and let her know the consequences of not paying. She knew she had to have the money in her account if she couldn’t make it to the payday center because she understood that Check ‘n’ Go would cash her post-dated check.

“Both times I used the service I was aware that I should not borrow more than I could afford to repay within a few weeks – even if it meant making sacrifices in other areas of my life,” wrote Manchester.

She reported that she would walk to the store instead of driving to save money on gas, forego her Dunkin’ Donuts coffee and cut back at the grocery store “to the bare essentials." She even pawned a pair of gold earrings to pay back the payday company and then got them back three months later at a reasonable interest rate.

"I managed to use a pair of gold earrings as collateral on a $100 pawn to pay my payday loan when I got caught short due to further unexpected expenses, and discovered the terms to be much better - 3 months to pay, and the interest was only $10/month, as opposed to $30/month." 

“I am aware that many people have already cut to the bone in their budget,” wrote Manchester, “but when the going gets tough is when we truly discover what we need and what we simply need to make life more pleasant.”

Robin Smith – Internet Nightmare

Robin Smith wanted to get her daughter a new netbook for Christmas last year. Smith has worked for the state of Rhode Island for 21 years and her husband works two jobs. She said they are not low-income.

It was two weeks before Christmas and she didn’t want to go to the bank. She went online and Googled “fast cash pay loans” and was directed to 500fastcash.com.

“It was my fault entirely,” she said about what would happen to her after taking out a $400 loan from the website, “I didn’t read the fine print.”

She said the site asked for a checking account number to issue the loan, which she provided. She thought with that number they would withdraw the funds from her account, like her mortgage. She knew she was being charged 400 percent interest, but believed the ease of getting the money online was worth the extra interest.

The day after taking out the loan there was $400 in her account and she used it to purchase the netbook.

At the beginning of February she checked her bank account and noticed there was a $950 charge to 500fastcash. She called her husband and asked if he had taken out another loan and he said no. Then she called them. The representative said she had paid them $950, but actually owes them $390 more.

“This can’t be,” said Smith. The representative told her she must not have read the fine print, which said that the loan must be repaid in two weeks.

“But I gave you $950, isn’t that enough?” asked Smith to the representative, who responeded that, no, you still owe us $390.

Smith told the representative, “you won’t get another dime out of me.” She called her bank, paid $50 to stop 500fastcash from withdrawing from her account.

But on March 30 she checked her account and saw 500fastcash – “$495 pre-authorized debit.”

She called up 500fastcash and asked them “How did you take money out of my account?” and the representative said, “Well, you didn’t read the fine print.”

The rep told her that when she agreed to the loan she gave the company a pre-authorized debit, which is an agreement that allows the company to withdraw directly from Smith’s account.

“So I paid $950 plus the $495, or $1445 for a $400 loan,” said Smith, “I could have borrowed this money from my parents.”

“About a month ago my husband’s phone rang and it was fast cash. They called asking if we’d like to take out another one. I can’t tell you verbatim what he said” said Smith.

This is the 3^rd article in a 3 part series on payday loans.

Part 1 –

Part 2 –