It Costs Money to be Poor

Predatory businesses such as pawnbrokers, pay-day lenders, rent-to-own stores, and used-car lots prey upon the poor and heavily indebted. There is a better way.

From Spero News
By John S. Rausch

A row of identical signs arranged like landing lights at an airport repeat the appealing offer: “Borrow $200, Repay $203.” This modern spider-to-fly invitation displayed in front of the office of payday lenders appeals to hard strapped workers who just need a boost till payday. What’s three bucks? Technically, since the loan spans only 14 days, three bucks in this case represents 39 percent interest (APR). After this introductory offer, the second $200 loan will demand a $230 repayment–or 390 percent APR!

Payday lenders, together with pawnshops, check-cashers, tax refund lenders, rent-to-own stores and “buy here/pay here” used car lots represent the fringe economy. The term “fringe economy” refers to those businesses that engage in financially predatory relationships with low-income or heavily indebted consumers by charging excessive interest rates or exorbitant fees and prices for goods and services. Other parts of the fringe economy include credit card companies charging sky-high late payments or over-the-credit-limit penalties, cell phone providers pushing excessive prepaid plans and subprime mortgage lenders hiding the real cost of the mortgage.

...

Around the world the poor have fought the money lenders through collective action with institutions like the Grameen Bank and credit unions. These are structures people of faith can explore as more middle class families slide into the ranks of the working poor. Universal health care would save countless families from bankruptcy, while a standard living wage would shrink the pool of the financially desperate. Add to this stricter and enforced usury laws and you create rungs on the ladder for moving up.
The vision: replace the spider-to-fly economy with one permitting a-place-at-the-table for everyone.

Click here to read the whole story.

Calling Cards get Static from Immigrants

While reading the story below about poor performance by telephone calling card companies, realize that IPM cards can be used as cash loadable phone cards. We can offer comprehensive cards and attract dissatisfied calling card customers.

From the Las Vegas SUN

By Timothy Pratt

For Adolfo Galvez, keeping in touch with his wife and 3-year-old daughter back home in Guatemala has meant learning a thing or two.

You change telephone calling cards every few months, because some cards lose minutes after being on the market for a while.

If you dial your wife's cell phone, you'll get fewer minutes than if you call her on a land line.
Then there are some things you just accept - fewer minutes than the calling card promises, dropped lines resulting in a loss of minutes.

If you complain? "There's no one who will listen," Galvez said.

The 30-year-old stood Thursday afternoon outside the Phone Card Super Center, a busy store near Bonanza Road and Eastern Avenue plastered with fiesta-colored posters offering dozens of $5 cards that allow immigrants and others to call foreign countries.

After four years in the United States, his experience with the cards has mirrored the results of a study released this week by the Hispanic Institute, a Washington nonprofit organization.

The study said the calling card industry is ripping off Hispanics and other immigrants, offering fewer minutes than advertised and hitting millions of immigrants , many of whom don't complain, with hidden charges.

Read the rest by clicking here.

IPM Starts Remittance Radio Webcast

International Personnel Management, Inc. (IPM) has begun a 30 minute weekly webcast about the latest in international remittance and stored value technology.

The live broadcast will be every Sunday afternoon at 3pm Pacific Time; 6pm Eastern.

Anyone may call in to the show by calling +1(724)444-7444 and when prompted the the Talkcast ID is 52760.

If you miss the weekly live webcast you can listen to past episodes anytime by coming here to the IPM Blog at http://internationalpm.blogspot.com/ or going directly to the Remittance Radio page on Talkshoe.com.

Listen in to hear the latest capabilities and methodologies in the rapidly growing industries of stored value and remittance.

Boycott protests Western Union fees

By David Milstead,
Rocky Mountain News
September 14, 2007

Western Union has spent much of 2007 worrying that some of its customers have stopped sending money for fear of deportation.

Now, an immigration-advocacy group is urging the transmitter's customers to stay away for a different reason: The company's prices are so high, the group says, they're exploitative.
The Transnational Institute for Grassroots Research and Action, an Oakland, Calif.-based group, is launching a boycott. The group says Western Union's fees are too high and it doesn't reinvest enough in the communities it serves.

The boycott announcement comes just as Douglas County- based Western Union announced a new, five-year, $50 million charitable-giving program called "Our World, Our Family."

The program includes scholarships for children in two-country families and immigration advocacy. It follows the company's earlier five-year, $40 million program of giving.

"We believe our level of giving is comparable with others in the industry," said spokesman Daniel Diaz. "We strongly believe our model of contributing to communities is working."

Francis Calpotura, founder of the boycott group, argues that the charitable giving is small in relation to the company's size, particularly when its fees "come from families without a lot to begin with."

Western Union's pricing has been a sore point before. The company faced a number of lawsuits in the 1990s that alleged consumers were misled by the company's undisclosed profits on foreign currency exchange. They were settled in December 2000, and the establishment of the Western Union Foundation was part of the deal.

There's no question the company's prices are higher than its competitors', as the company positions itself as having an unparalleled branch network: 300,000 agents worldwide, or as many as the next eight largest money transmitters combined.

Competition on certain transmitting "corridors," particularly to Mexico, has been intense in the past several years, and Western Union reduced prices to narrow the distance between it and other companies. Still, said Gwenn Bezard, research director at consulting firm The Aite Group, Western Union's prices remain about 10 percent to 15 percent above closest competitor MoneyGram.

"To an extent, you can argue it's too expensive," Bezard said. "But there aren't too many good alternatives."