Wednesday, January 4, 2012

Never a borrower or a lender be

I was pleased to read the province introduced the Payday Loans Act. I admit to not being a big supporter of pawn shops, money marts and the like, but I have come to understand for those in desperate need they are a necessity.

I have a special distaste for pawn shops. While on Council, at the request of the police, the operations of these businesses was reviewed. Police found that too many stolen articles were being sold through these shops. I toured many of them and became horribly depressed when seeing kids' toys and bikes had been pawned for pennies. I couldn't wrap my head around how anyone could be so desperate for $5 or $10 that they would sell off toys.

I also discovered that a big market was construction workers pawning their tools for the weekend and then looking to employers for salary advances so they could redeem them for work the following week.

I'm not sure that posting the fees through large signage so customers can shop around will make any difference. I was led to believe that once a relationship is established between the business and it's customer, the customer is pretty much hooked. And anyone that desperate for money probably isn't shopping for best rates - only quick cash.

Although 23 per cent still seems outrageous, I would guess anything lower than that would see some of these businesses reducing service. Then again, many credit card companies charge far higher rates and get away with it.

Maybe money is the root of all evil.

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