I worked for a title loan company in Independence so I know firsthand the unethical behavior of the title loan industry.
A customer would come in with a financial emergency—rent was due, car repairs were needed, electricity was going to be turned off, medical bills were mounting, etc. The amount a customer could borrow depended upon the value of their vehicle. If the customer said they didn’t need to borrow as much as the value of the vehicle would allow we pestered them to take out a larger loan than they wanted. We would tell them “Just take out the maximum amount and bring it back if you don’t need it.” Of course they never brought the larger amount back.
We never asked for information on their income or expenses or how much they could afford to pay monthly. We knew if they could not afford the payments we would take their car. A car could be taken from them if they missed a payment by a day or two. We had customers who needed their car to get to work and elderly persons that needed a car to go to the doctor or grocery store. They were shown no mercy, even though we had pestered them to take out a loan they could not afford.
We told them the monthly payment but never told them the payments were interest only. If they paid what we told them they would never pay off the loan. We never gave them a schedule for their payments showing they were only paying interest. After making payments for several months they might ask how long it was going to take to pay off the loan. We would then tell them they could make a larger payment that would include both the interest and principal. If they asked to increase their loan before the old loan was paid off then any payments on the principal of the old loan was not credited towards the new loan. Those principal payments were just lost.
During the week a payment was due we started calling them daily to remind them to come to the office to make the payment. Sometimes we harassed them three times a day. When they took out the loan they had to provide names and telephone numbers of people they knew. We would call those people and harass them, even though they never agreed to be a reference for the person taking out a loan.
If borrowers tried to pay off the loan we would encourage them to make a smaller payment to keep the loan active. If they did eventually pay off the loan and got their title back they usually paid 3-4 times the amount they borrowed.
I felt so guilty how we mistreated and manipulated our customers. I left my job.
* Author's name has been changed to protect her identity