By Angela Martin of Portland, Oregon. Angela is an economic-fairness advocate at Our Oregon. This is part one of two.
In a classic scare tactic move, the national car title industry is running an ad on Oregon television claiming that car title loans save lives.
The campaign is sponsored locally Northwest Title Loans and highlights a Salem senior citizen who says she turned to a car title lender when she ran out of money to buy her monthly insulin supply.
In the ad, the customer says that without a car title loan, she would die. Here's the ad:
In reality, anyone in Oregon who needs life-saving medicine has more affordable and reasonable options than going to a loan shark. These companies prey on consumer fears in order to convince them that they have no other choices.
Taking a loan against your car means facing 300 percent interest and loan terms that result in paying back three times the value of the original loan. These high-cost loans can only make their situations worse and could mean the repossession of their cars. For many people, that means no way to get to work to earn the money to pay back the loan, creating a hopeless cycle.
As an example, last year The Oregonian reported on a typical experience from Northwest Title Loans: a man borrowed $400 against the title of his car. Under the contract, he was required to pay $129 per month for 12 months – a total of $1,548.00.
Anyone in Oregon who needs life-saving medicine can get real help that won't send them into debt from many other sources.
And what happens next month, when it's time for more insulin? Thanks to the high interest rates of the car title lenders, she'll have even less money and be less able to pay. That's how predatory lenders trap people into long-term debt.
Lobbyist admits customers were bribed
This misleading ad isn't the only dirty trick by the car title lenders – they have been enticing their customers to call lawmakers by giving them Starbucks gift certificates. When Sen. Floyd Prozanski of the Senate Commerce Committee asked Northwest Title lobbyist Mark Nelson about it during a committee hearing today, Nelson admitted, "It did occur. It was my understanding that it ended quickly." Other lawmakers say they have heard that customers are forced to call in opposition to regulations before they receive their loans.
No surprise that Northwest Title Loans would use mafia-like intimidation practices, given its history. More on that tomorrow. In the meantime, get involved to stop loan sharking in Oregon.