Nick loaned money to people with the same bills that customers used to pay off their delinquent loans moments earlier.
“They like having people in debt,” Nick wrote in an email, “because most of them end up paying off and are usually broke in the end.”
Nick, who worked for several payday loan companies over the course of several years, was one of more than a dozen people who contacted Global News in the wake of our story this week about a woman’s decision to leave the payday loan company whose practices, she said, made her sick.
We have had stories from people who loved working for payday loan companies and hated it; who badly needed money to get through a difficult time and found themselves taking out loans to pay off loans for years.
We used first names and initials because a lot of these people worry about the repercussions if they talk about their job or their credit history.
Alberta unveiled a bill Thursday to reduce payday loan fees to the lowest in Canada. Ontario, Nova Scotia and provinces and territories across the country are considering similar reforms.
Google said it was banning ads for loans with terms of less than two months (and, in the United States, with interest rates over 36 percent).
Meanwhile, credit unions and other organizations are rallying to meet the real need for multi-million dollar, short-term, low-value loans for people whose credit is not good enough to borrow money. money elsewhere.
Canadian Payday Loans Association President Tony Irwin says it’s a bad idea. He argues that being forced not to charge more than $ 15 for a $ 100 loan will bankrupt his members.
A Deloitte studies the mandated association have found that it costs payday lenders at least $ 20.74 for every $ 100 loan.
“It will mean store closures. This will lead to job losses. And that will mean a restriction on access to credit, ”Irwin said.
“There is no doubt: the stores will be closing. “
Nick doesn’t buy it.
“Operating costs have not increased, salaries have rarely increased significantly, but turnover has definitely increased,” he says.
The Calgary resident left the payday loan industry years ago “on bad terms” but still has a screenshot of an email he says was from a district manager in the city. payday loan company where he worked, berating employees for not lending customers the maximum amount.
“Management wanted us to eliminate the customer from the transaction by simply giving them money, a contract to sign and a return date with the loan and fees, and a way to get them back if they didn’t come back. this date, “Nick told Global News.
“I was yelled at once because a client was very adamant he only wanted a hundred and fifty dollars, when he qualified for over a thousand.”
The Payday Loans Association says most loan approval procedures are automated, and cites a study of the transactions of three payday loan companies that found that 62 percent of borrowers in 2014 had not borrowed. the maximum amount, and the average customer borrowed 68.1 percent of the maximum.
CHECKED IN : In the payday loan cycle
“We are not looking to scalp people for money”
Stephany had heard horror stories before he started working at a Saskatchewan payday loan company. They weren’t real, she said.
“I started to see it as a way to help people who have no other means.
Stephany sees well-paid people who need a one-time cash injection and working poor people who become repeat customers.
It is true that payday loan employees are advised to lend people the maximum amount they are entitled to, she said.
“But, for me, it’s more about making sure they have enough to do it.”
She believes, however, that some companies are more ethical than others: she has taken out loans from places that she says have given her misleading information about what is and is not allowed by law.
“They are not being honest with people.”
Having said that, she would like to see clearer legislation and, ideally, uniform laws across Canada. And she sees no problem with payday loan companies charging lower fees.
“We are not looking to scalp people for money.”
But they serve a purpose, she said.
“A lot of people either have such bad credit or don’t have the capacity – the banks won’t give them money,” she said.
“I don’t think getting rid of the industry is going to help.”
IN DEPTH: Canada’s financial instability trap
“It was basically a downward spiral”
It all started with the first and last month’s rent. Greg needed it and didn’t have that much money on hand.
So he withdrew $ 750 from a payday lending institution. And when that, plus costs, was due two weeks later, he didn’t have the money.
“It snowballed from there,” he said.
“You decide to go to another place, and another place, and another place. … It was essentially a downward spiral.
Two years later, he owed money to three different payday loan companies from which he continued to borrow the maximum amount allowed.
“I remember looking at my statement one day and saying, ‘I pay $ 700 a month in service charges? “”
He eventually went to a non-profit credit counseling agency in Barrie, Ont., Where he lives. They established a payment schedule for him. He did not return – saved up, bought a house.
“You can get up from it, for sure.”
He would like to see stricter regulations, although he is not sure the provincial government would bother to talk to former borrowers like him.
“Dude, that’s stealing,” he said.
“I understand that people need money, but these fees, I was borrowing pretty much all of my paycheck, but I had to pay back, for example, $ 300 [in fees]. “
The disclosure provisions are set out in the regulations, the Payday Loan Association’s Irwin said in an email, “including a poster in the lobby that shows the cost of a typical loan of $ 300.
“It is very important that the borrower knows the cost.
“The pressure … was immense”
AB started working at a payday loan company “under the illusion that I was helping people”.
She was quickly disillusioned, she said in an email.
“Of course, maybe one or two that I help, but the majority I crushed and it crushed me in turn! I would watch people go into more and more debt.
She started having panic attacks on the way to work. I started taking anti-anxiety medications.
“I was crying all the time thinking about how I was going to spend my next shift. The pressure on staff to set “goals” and “daily profit targets” was immense, ”she said.
“Leaving was my best decision, but I will always meet old clients and worry about them and [wonder] if they’re okay now.
INCOME IMMOBILITY: Fewer Canadians move up – or down – the income ladder
WATCH: Payday Loan Industry Under the Microscope in New Brunswick
Tell us your story: Have you been trapped in a payday loan cycle? Have you worked for a payday lender? We would love to speak with you.
Note: We may use what you send us in this story or in future ones. We will contact you if we have any questions, but we certainly will not publish your details.