High-Interest Payday Lenders Using Courts In Utah To Get Borrowers Arrested


The unfortunate reality is it’s often tough
for lower income households to make ends meet leading many Americans to seek high interest
payday loans to cover their monthly bills. But there’s something sinister going on in
small claims court, which you’re seeing unusually high traffic from collection agency who seek
arrest warrants as a means of forcing borrowers to pony up. Investigative journalist, Ben Swann, joins
me now to walk us through all that. First of all, Ben, this is a story that’s
been alive a long time. For some reason our brain dead Congress refuses
to act on it. There are no regulations that that say, hey
you, you know what? You can’t charge 625% interest rates, which
is what these folks are doing. You can’t do that because it’s contrary to
the way we do business in a democracy. What’s your take on this story? Yeah, absolutely. Well, first of all, it is a tragic story in
a lot of ways, for really, for a lot of families across this country who struggle with these
loans. So, you know, when someone is in a very tough
financial position, they’re trying to make rent, they’re trying to, you know, pay for
a new car that they need because their family is expanding and they’ve got to get to work,
that many times they’ll take out these payday loans or these title loans. And as you said, sometimes these interest
rates are as high as 600% APR. The average, the average across the country,
Mike, is 390%. That’s the average across the country. So it’s an incredible amount of money that
people are having to pay. But what is really alarming about this, it
goes back to what you said here at the beginning, which is the weaponization of small claims
court to actually create a debtor’s prison, prison system, which is really illegal in
this country, to have debtor’s prisons. To create that system through really the abuse
of the court system and the abuse of the bench warrant system. Okay. So 1833 we had enough sense to say, you know
what, something called due process, equal protection. We’re going to do away with debtor’s prison,
but it’s back. And the loan folks, this really, you know
where the center of gravity is, is in Utah. That’s right. So in Utah, they’re pushing the limits on
virtually everything. And one thing they’re pushing the limits on
is they’re using the court system to get people who owe money arrested. And then once they’re arrested, that person
who owes money has to post a bond. When they post the bond, then the lender gets
to come in and take the money from the bond while that person spends days or weeks in
prison, in jail. So it’s contrary to everything that we believe. How, how widespread is this right now, Ben,
what’s going on nationally with this? Yeah. So, and again, this, what’s happening in Utah
maybe as a microcosm of what’s happening in other places as well. You’re right, it is probably the worst place,
but it is a web of corruption. And the way it works, just so folks understand,
is that because as you said, we don’t have debtor’s prison. You cannot send someone to prison for not
paying back a loan. That’s not what they’re doing here. What they do is essentially they go to court
and, and essentially ask the court to issue a bench warrant for someone who owes us money
so that that person is compelled to come to court and then to settle this agreement or
work out a payment plan. And because many of these people don’t get
the notice, they might not see it. They’re working and they can’t take off work
to do this, because they don’t show up for court,
now a warrant is issued for their arrest and many times they’ll go to jail for this. Or as you said, they’ll have to pay this bond. And so, you know, the, in Utah, these lenders
will set up a kiosk at the local County courthouse. They’ll sit there and when people come in,
instead of seeing a judge, they have to go and talk to essentially the plaintiff in the
case first and try to work out a settlement with them. And then the plaintiff, once they leave, goes
and sits before the judge and says, please issue a warrant for this person, this person,
this person. So what we’re seeing here is that really an
incredible abuse of the court system in the state of Utah. 60% of all the small claims cases going before
judges are brought by payday lenders. I mean, think about that, Mike. 60% come from payday lenders. Okay, let me, let me expand this just a little
bit. Yeah. Let’s talk about the human side of this. So what we have is people that, that already
having a tough time. Their, you know, their jobs not paying enough,
they’re having to get a loan so they can pay their mortgage or pay for a car loan, whatever
it might be. But the, what happens is the lender counts
on that person not responding to a court summons. That’s right. And there’s a lot of ways that that happens. They might have, they might have jobs they
have to take care of. Maybe they’ve moved, maybe they have children. You know, they’ve got to take care of children. There’s all kinds of issues that we understand
affects, affect part of our population in a way that doesn’t affect everybody. But when you’re, when you’re living at the
margins and you’re, you get a summons, well, okay, hopefully you can get there. But what ends up happening is if you don’t,
the lending company then jumps all over that you then have a criminal bench warrant issued
and then you’re, then you’re in big trouble. I don’t see this ever turning around, it’s
certainly not going to turn around under Trump. It didn’t turn around under Obama. It just seems like this is just a new way
of life in America. What do you think? Well, I, unfortunately it seems to be. What’s really tragic about this is that Trump,
of course, campaigns as a, as a champion of, of, you know, the, the, the forgotten people,
if you will. And yet certainly he’s not acting like that,
in any manner, and certainly not in this manner. Look, the Obama administration had an opportunity
to, to renew and revise a lot of these policies and to say, hey, let’s, let’s cap what payday
lenders can demand and ask for. But none of those rules have gone into effect. The Trump administration has not put any of
those rules into effect. And so really the, the people who are losing
out here, Mike, and this is what I know you know, and it’s so important for your viewers
to understand, the people losing out here are really people on the margins of society
who have so little to lose because they are struggling just to survive. We live in an economy right now where it’s
very difficult for people to survive on one job or one paycheck. Many times people will lose those jobs and
so they’re left in this position where yes, they’ve borrowed money and, and done it at
a high interest rate. And in some cases they’ll do it, keeping this
in mind too, to protect themselves from over drafting. Now, when you say, well, wouldn’t it be better
just to get an overdraft fee? But when you think about that, if you have
$100 and you overdraft on that and get a $35 overdraft fee, the APR on that is over 12000%. Yeah. Well, Ben… So, so as bad as payday lenders are, bankers
are pretty bad about it too. Yeah. So, we’re living in a world where a lender
can charge 652% and get away with it and say, that’s a normal course of business today in
America. Ben, thanks for joining me. Okay. Mike, thanks.

73 comments

  1. My home state. Probably the most corrupt state government in the country. No joke. No hyperbole.

    Edit – APR rates are always reported. But they don't actually reflect real monies paid. Calculate the EAR to get a more accurate figure. You'll be shocked. Finance/accounting major here.

  2. Tax payer money is being used to support 4-profit lending to bring back debtors prisons. You all cannot afford for shit like this to happen.

  3. to be a citizen in the USA these days demands one becomes his or her own accountant, lawyer, and enforcement lest one serves as mere entertainment and fodder for parasitic mercenaries that our "legislature" have willfully sold them laws making all their moral-less garbage for-profit legal. Welcome to America headed straight downhill as a snowball headed for hell.

  4. Yet, Obama bails out the banks while the bank retires their corrupt CEOs with huge severance packages as they gouge the people. No Democracy nor Republic, an Oligarchy.

  5. anyone still think this isn't a fascist country? when corporation have more power and rights than citizens, you can't call yourself a free republic that's for sure.

  6. Sorry, but alot of the people who take these loans probably have no intention of paying it back. SOME (not all) have top of the line cars, cable TV (over $100.00 per month) cell phones and 4-5 kids that have cell phones too. Their Facebook page probably makes them look like the Kardashians😬. I have a burner phone that costs me $80.00 PER YEAR!! I have an 8 yo old car that I maintain like clock work. People have to set boundaries for their spending but their lust for material things has beat them down and they are teaching their kids the same. Low wage jobs is a big problem all over the world, I know that …..but people live above their means. Anyone who takes a loan out with a 500% interest charge attached is a moron. How many don't speak English and don't even know what they are signing?

  7. What about in Florida the landlords putting evictions in Courts when the person notifies losing their income and needs to leave. They let them go but after a few months they go to Court to demand the tenant which never received any notification so that appears in their credit report. Person will not receive their deposit no matter if the lease ends so the person doesn't renew but did not notify one or two months before! How to know an income will be gone. And by the way, they rent the apartment immediately for the long "waiting" list. No one cares. Families to the woods.

  8. Restore Our Future. … A so-called Super PAC, Restore Our Future is permitted to raise and spend unlimited amounts of corporate, union, and individual campaign contributions under the terms of the Citizens United Supreme Court decision. Restore Our Future was founded by Romney aides in 2010.

    Restore Our Future, a super PAC supporting Mitt Romney, got a boost in February -2012 from an industry that is currently under fire
    by the Obama administration: payday lenders

    At least seven payday lending companies threw their support – and a cumulative $227,500 – toward Mitt Romney's super PAC in February, according to the PAC's latest FEC filings

  9. One utal cash lender making fake loans to people whose identity was taken from TOR, and without the persons knowledge issuing fake loans, keeping the money, proceeding to ar iteration even though the bank does not have the legal right to lend in other states or countries. Utal state is knows of the activity and does nothing because the bank is paying lobbyists to speak on their behalf. I was a victim of this scam which is under investigation by FBI. Frustrating that they are getting away with this…..they got me while I was living in germany, I can only imagine how they are for those living in their state. F.ing crooks

  10. For all the pretended piety of Utah's Mormon-dominated state legislature, they've apparently never met a usurious payday lender they didn't love. Gambling and legalized pot are taboo, but extreme usury seems just fine. I suspect a bit of collusion and bribery is afoot.

  11. Most low income people have poor spending habits. Stop living beyond your means. Stop having kids and buying things you can't afford. It's that simple. And if it's a health related issue declare yourself indigent and your medicine is covered. Come on; people need to think and ask questions before shtf money wise.

  12. Lawyers and others are crooks . Probably not even sending the mail and saying they are . Should be certified mail having to be signed for

  13. Bottom feeder lawyers buying debt for pennies are responsible for this. Corrupt judges are enjoying kickbacks from these lawyers.

  14. I've noticed American businesses use OUR law enforcements as goons. Show them and hold your taxes…oops cant do that anymore no thanks to Reaganomics, it was supposed to be a key element for revenue but it pretty much locked up a never ending flow of cash weekly as opposed to quarterly or annually. Since then our military spending sky rocketed and we created enemies out of thin air.

  15. Have to love how America is regressing back to the days of debtors prison. This crap was outlawed in the early 1800's and now our wonderful capitalistic system is allowing it to come back. Ridiculous!

  16. The GOP or DNC doesn't give a damn about the American poor. They both are the one and only party of the 1% rich elite. There is only one way to turn this around and that's for the poor to do what the poor did in France late 1700s. Break out the guillotines! Remember America and the US Constitution!

  17. Mysasser1 says poor people cause their problems by living beyond their means! Inadequate salaries mean that more than 50% percent of households at or below the poverty line can’t afford the other small necessities like a car to get to work that may last until last payment! If they use public transportation that’s not always okay because they only run in certain areas and hours so by working overtime you still lose money on having to walk home because you don’t have enough time and energy to cook and being in food deserts mean there are no available full service grocery stores so your options are junk food which is the most common items in the areas they can shop because there is no transportation to the stores after work or fast food places which take more cash out of pocket along with food stamps! You don’t qualify for a bank account because you can’t afford to keep the minimum amount in the bank account so overdraft fees of $35 a pop get what little you get! You use a check cashing service and you get charged for a money order to pay your rent and utilities! Even buying at a thrift store still requires some money but by paying for rent, food, transportation and utilities you are still underwater! The places that hire only hire part time so they don’t have to pay benefits! Your working means any benefits like welfare reduce the amount you get which is based on net not gross. At many times it’s dollar for dollar so after working on a legitimate job you make less because they cut your food stamps, medical and cash which aren’t taxed and your wages are! So working you’re paid less than you were receiving and after you’re earning money at a job they also stop your daycare because they consider you getting money from your job and after taxes you aren’t! This adds another expense for you because most impoverished households have all of the adults working so it’s either pay someone who’s unlicensed or leave them alone then hope no one calls children’s services on you! The majority of the residents in homeless shelters are working families not drug addicts, alcoholics and crazies! Now with all of the high expenses you claim are caused by living above your needs which of these needs are above the lifestyle you think are not necessary?

  18. Well what about what I just heard That the Man named Thomas Bowers 55yrs. Old,he was the one That signed off on Trump's loans,of 2 billion dollars from Deutsche Bank ,once the investigations started he was found Dead by hanging himself, suicide,Hmmm.

  19. Personal debt in the uk is between you and lender, the police would never get involved, you can't get arrested for owing money, the only time police get involved is if the bailiffs and plaintiff's start fighting then its only to maintain the peace

  20. GOP states are debt to prison. Democratic states are debt to forgiveness. Imagine that! Every state that has legalized marijuana is Democratic and none are Republican. Imagine that the GOP is a fascist joke!

  21. I rather be homeless before I borrow from these loan sharks. They steal your dreams, your hope and your life.
    Don't do it!!!!!

  22. it's called debtors prison. these loan companies are doing what it's called an act of treason. they should lose their heads over this

  23. To put this into perspective, if you get a Payday loan for $1500, you pay $20 bucks a day in interest

    That's $1500 of the loan and $300 of interest due next paycheck

  24. never borrow more than 100 bucks from these places, just enough to get you through to the end of the month, I've used the services of these places for years, the trap that people get into is they just go and take the max out which is dangled in their faces like a carrot, that's the trap, now you can't afford to NOT rewrite the check, I call it the pay advance merry-go-round and it's nearly impossible to get off

  25. rent to own places are just as predatory, I remember when the x box 360 came out, when you tallied up the interest payments, that 400 dollar game console was over 1200 bucks

  26. asset forfeiture pays for most government employees vacations (especially for your local police dept.) , forget about an annual federal budget, that's not enough money , stealing your property is the new trend weather you have commited a crime or not !

  27. A summons is supposed to be hand delivered by an administrator of the court…..usually a Sheriff. There shouldn't be a scenario where someone doesn't GET their summons! This is corrupt beyond understanding!!

  28. Trump gets his loans from Russia. The poor Americans get mafia interest rates from payday loan sharks. Trump is not against payday loans for the poor. If they are poor they are his base. Simple.

  29. they are just loan sharks walking the thin line to being totally illegal..the government needs to protect the citizens from these places as they are leeches living off the sorrow and hardships of those less fortunate and a lot of the times the victims do not really understand what they are signing…

  30. Every one that says we have to bring back America is clueless. This is America. This pos report really doesn't say any thing
    Show who mostly uses this service, mostly illegal aliens.

  31. Unfortunately, this fits under Capitalism. Like it or not. Still want to change that? Capitalism doesn't have moral constraint. Just a bottom line. Look it up.

  32. I WAS DESPERATE AFTER MY HUSBAND DIED.
    ONE $200.00 LOAN COSTS ME A YR OF RE BORROWING AND UNGODLY INTERESTS .
    I PAID IT OFF WORKING 3JOBS . DONT GO TO THESE LOANS PLACES .
    THAY ARE BASICALLY LOAN SHARKING THRU LEGAL MEANS . LENDERS OF THESE TYPES ARE JUST LOAN SHARKS . !!!

  33. There were regulations when Obama was in office but Trumps administration struck these regulations down FACT. FACT. FACT. REPUBLICANS care about nobody nor no one but their PAYCHECKS. Republicans are straight up Whores. Traitors.

  34. Mitt Romney is probably backing these get rich loan shark enterprises and debtor prisons. . . . he's a venture capitalist leach, like Orrin Hatch and his over the counter quack pill mill snake oil supplements industry which get sold everywhere without the blessing of the FDA.

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