Myth: The thousands of people who take payday loans are degenerates who know what they are getting themselves into. They use it to make up for bad financial planning and of-the-moment purchases.

The reality is that most people who borrow from the payday industry are normal people. They work 9-5, have kids and live a normal lifestyle. That is until they are sucked into the debt trap lifestyle spawned by accepting their first payday loan.

Sandra Harris

“At the time it seems like the way out, but this is not a quick fix. It’s like a ton of bricks.”

A respected member of her community in Wilmington, NC, Sandra and her husband were always months ahead of the bills. Her husband then lost his job and she was left with the responsibility of not letting everything go to shambles in the midst of unemployment.

Her debt trap began with an initial $200 payday loan and she continued to renew it because she needed to pay off more pertinent bills like health care, utilities and food. The decision was not entirely hers, she felt heavily encouraged to simply renew the initial loan from the payday representative.

As the weeks dragged on, Sandra continued to renew and ended up taking larger loans. When the boiling point hit her, Sandra realized the only way to pay back the original loan was to take another from a new payday lender. As a result, she was forced to pay over $600 a month in loan fees which resulted in her family being evicted from their apartment and car repossessed. Her road to recovery started with contacted a debt consultant agency and working everyday to pay off her debts.

Lisa Engelkins

“I spent over $1200 in fees for a $255 ‘revolving’ cash loan,” she said. “I was throwing away $90 in fees every month just to use the same $255 cash payday loan. And, worst of all, I had no idea how this trap worked until I was out from under it.”

Being single mom is tough enough and you are always looking at ways to make the ends meet. Lisa was convinced payday loans were a good way to try to pay down her expenses when she saw a run of commercials on the TV. She quickly found an Urgent Money Service store close to her home and borrowed a $60 loan. The size of loan grew into a $300 loan and then she got caught in debt trap. Before she could seek help, Lisa had paid over $1200 for a $300 loan.

Lucky for her, she realized the predatory nature of the industry. She found help, let the check bounce, and managed to pay back all she owed within a few years.

Anita Monti

“I felt like I was in a stranglehold each payday. After awhile, I thought, ‘I’m never going to get off this merry-go-round.’ I wish I’d never gotten these loans.”

For a while, Anita Montit’s routine went as follows every two weeks: Pick up her paycheck at her computer technician job and go to an Advance America and then Check ‘n Go, where the first loan pays for the fee for the second loan. She spend over $100 in loan fees every two weeks just to keep borrowing more.

Anita fell into debt trap from wanting to spend a little more on Christmas presents for her relatives. She figured payday loans were harmless and she could pay them back in no time. However, the encouragement from representatives to merely renew the loan kept her borrowing every two weeks instead of paying off the entire loan.

Stephanie Singleton

Ms. Singleton didn’t think twice when she was recommended to renew her first loan instead of pay it off completely. After all, taking care of the health of her kids and vital bills were far more important, right?

Stephanie worked in hospital administration and had no problem paying all the bills and taking care of her family. She took out her first payday loan because it seemed harmless and the extra money could help tie up some financial loose ends. Like the other victims, Stephanie began to only pay the renewal fees and within a few months she was paying over $800 in fees to keep the loans alive. She lived in fear of entering a lawsuit because of a bounced check and the payday locations would not negotiate one bit with her situation.

She required the help of friends and family to afford an attorney that helped her with a payment plan to get out of debt.

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There are also individuals who have been targeted by fraudulent companies who are illegally based in certain states and operate online. Tim is one such victim:

My name is Tim and we live in Little Rock. We were running behind with a few bills and my parents who are on a fixed income needed some financial help. I really didn’t know where or who to turn to for help so I applied and received a $300 payday loan over the internet. My intention was to pay it off on my next payday but instead only the fee of $90 was drafted from my account. By the middle of September I had paid them back $450 in fees alone.

Our finances were getting very tight as we had accumulated numerous medical bills. So I contacted the lender to see if an arrangement could be made to either reduce the amount I owed or even declare the loan paid in full since I had already paid them back more than I had borrowed. But they refused to work out any kind of an arrangement with me. I had enough by then and I was not going to allow them to have access to my checking account. So I closed my bank account and opened a new one. This was very hard to do because we have had that account for almost 20 years, but it was the only thing I could do to prevent them from taking more of our money.

Shortly after I closed my account, I filed a complaint with the Arkansas Attorney General’s Office. They were very helpful and encouraging. They attempted to contact this lender and as of today the lender has not responded to the AG’s inquiry. I also did some research on this “lender” and found out that they are a part of a much bigger operation. I believe that they are headquartered in the Bahamas. They did have a mailing address somewhere in Utah but after tracking that down and speaking with a banking official in Utah, I learned that it was just a mail box for receiving mail and that they were not licensed in the state of Utah, let alone the state of Arkansas.

Now after a few months have passed, I’ve started receiving e-mails from them offering me a one-time settlement of 70% of the balance they say I owe of $495 and that they are there to “help” me. But for a one time offer, I seem to receive that e-mail about two to three times a week. It’s almost comical. But now I’m starting to receive phone calls at work. I do have caller ID so I don’t answer any number I don’t recognize, so I just let it roll over to my voice mail. That was okay for the first time, but now they are calling our receptionist to get through to me.

On two occasions I notified them that I was not to be contacted by either e-mail or phone at my place of business and each time they have ignored my warning. I told them in my last e-mail that they would not receive another payment from me. Then just this morning I received another e-mail from them at work (after I told them not to contact me). This time they were offering me a payoff of two payments of $170 due on 12-1 and 12-15 and the only payment method is Visa or MasterCard debit/credit card. These people must think I’m stupid to give them that information let alone pay them a total of $340 on a $300 loan of which I have already paid them $450!

According to the Attorney General’s office, the loan is illegal and in violation of Arkansas law. They also told me that it is highly unlikely that they will attempt any kind of legal action against me. These “businesses” are sharks that prey on people in their times of need and need to be shut down. I never should have tried to get a payday loan especially one over the internet in the first place. I encourage everyone who reads this to never under ANY circumstance take out a loan from any Payday lender, especially one over the internet.