Paid Blog Posts for Payday Loans
April 10th, 2008 by Ana
I’ve noticed a rather distressing trend in many mainstream blogs: they write paid posts advocating payday loans. I’ve known for a while that payday loan places have been running aggressive advertising campaigns on the web which include buying paid posts on blogs. I just naively assumed most bloggers wouldn’t fall for that.
Well, I admitted it was a naive thought! I also thought people read PF blogs more than any other type LOL A few illusions have been crashing down over the past several months.
I’ve scratched my head, wondering what justification bloggers tell themselves to help them sleep at night after writing a paid post for a payday loan place, and then it occurred to me: not everyone knows how bad payday loans truly are. Seriously, how long did it take Congress to figure out what payday loans do to the military? How much longer did it take Congress to finally write and pass a law limiting how much interest payday loan places are allowed to charge military members?
Even though Congress finally woke up and discovered how badly payday loans were affecting military readiness, those same protections are not extended to civilians. The average interest rate on a payday loan is 400% (NOT a typo!) with anecdotal evidence of up to 800% interest on some (Yes, that is EIGHT HUNDRED PERCENT interest) when “processing fees” are factored into the equation.
So why would otherwise ethical and honest bloggers be accepting money to write posts extolling the (supposed) “virtues” of payday loans? That question has been rolling around my mind for well over a week, since I saw a payday loan paid post at a blog I respect. Then, the answer occurred to me: some people just don’t know how bad payday loans truly are!
Not everyone lives in a military town where the payday loan, check cashing, cash advance, and title pawn shops line up thicker than the fast food, bars, and strip clubs outside nearly every single gate leading off post. Not everyone has lived on the “poor” side of town, where every liquor store has a payday loan place attached to it. Not everyone has stuck their foot into that trap due to ignorance. Not everyone has served in the military and seen soldiers trapped in the debt cycle, or know about the hideous collection tactics payday loan places use.
There are some bloggers (even PF bloggers) who just don’t see a problem with advertising payday loans. There are also quite a few who just don’t know about how nasty payday loan places truly are (and very VERY bad for the “customer”/victim). To the first category, I have nothing that I can say that will change their minds. To the second category, I truly hope this post and these links will open your eyes and convince you to take down those paid posts that advocate payday loans. There is a reason payday loans are often called “legalized loan sharking.” They make so much money off their “customers” (victims) with their 200-800% interest that they are easily able to afford to pay handsomely for these ads and blog posts - and still make profits.
Posted in debt |
April 10th, 2008 at 8:51 am
When I started out with Free From Broke I got an offer to place some text links or write a post on payday loans. As I was just starting out it was real exciting to be offered money. I sat on that email for a while and in the end I realized it was against everything I intended to do with my blog to accept the advertising. I just couldn’t do it. From what I know of payday loans they are real bad.
April 10th, 2008 at 10:14 am
I never fell prey to this vicious circle of predatory lending, but have read enough to have an abhorrence for payday loans. I would never boog for something I can’t in good conscience support. Good post!
April 10th, 2008 at 10:19 am
That’s quite awful. I would definitely stop reading any blogs that promoted those horrible companies. I keep an eye out to make sure those ads don’t show up in my Google ads (served by Google- I have little control unless I see the ads).
Sad, but some people simply let greed control their ethics.
April 10th, 2008 at 10:32 am
Eden, that is why I don’t run AdSense. Can you imagine the ads that would show up on this post??
April 10th, 2008 at 12:06 pm
I would certainly never knowingly run an ad for one of these places, but I have seen some strange stuff coming up on my adsense as you mention. It’s something I need to keep on top of more.
April 10th, 2008 at 4:15 pm
About a month ago I was contacted by someone who wanted me to put a link on my blog or in a post to a pay day loan site. They even said they would pay if it was a negative post. I turned them down flat. I am not giving link love to those places period. And yes, I have noticed links in sidebars of at least one PF blogger that I had held in high regard. To me it isn’t worth any amount of money to sell out my readers. LOL. I guess maybe that’s one reason I’m poor.
April 10th, 2008 at 4:17 pm
Wish I could edit my comment. Posts like this one will not only educate readers but it will also tend to come up higher in searches and maybe discourage some readers from getting one.
April 10th, 2008 at 4:58 pm
You are right about how bad payday loans are. I think a big part of why people would do it goes to why they blog. Some personal finance blogs are largely about helping people. And they might have a secondary focus of making some money (or may not). Many other blogs exist to make money and only provide content in order to make money. If it happens to help the blog make more money to provide useful info - fine. If providing junk makes more that is fine with them too.
April 10th, 2008 at 5:52 pm
You are right about how vile these payday loans are - and have you ever noticed that most of these establishments set up shop in the poorest parts of towns, or next to military bases, or an area where many elderly live. I wish one day there would be a way to legally shut these guys down, but unfortunately they will always have a steady stream of traffic.
April 10th, 2008 at 8:44 pm
There have been many opportunities out there to blog about these loans. I myself do not believe in them because I have seen what they can do to people and the amount of interest that they charge.
Why do people use payday loans? Most are uneducated people that work hard for their money. They do not know what the contract says. I know a lady that ended up paying 1500 dollars for a 150 dollar loan. But she had kids and needed money for food.
These companies prey on poor people because they know that at some point they will need money. And they are very aggressive at advertising. You and I are fortunate to know what the outcome could be to one of these loans. I think they should be banned.
April 10th, 2008 at 9:44 pm
For the record, I have received several emails about putting in links and posts for payday loan places. Y’all can probably figure out what happened to those emails! (and probably imagine some of the colorful phrases I used.)
April 11th, 2008 at 2:46 am
I suppose the folks going for payday loans just don’t know better.
And if resources for such information (like pf blogs) tout payday loans, then it would be even worse.
Its good that you are making a stand on this, Ana.
April 11th, 2008 at 3:56 am
I accepted an offer once in my other blog. But the more I read their site, the more I was convinced that it is not good in the long run. So, after pushing the publish button (I did it anyway), I immediately typed another blog entry to cover the post.
I’ve never written about payday loans again.
April 11th, 2008 at 4:19 am
People who have to pay others to talk about them in a positive light are bottom feeders, and bottom feeders always find a way to survive.
April 11th, 2008 at 4:40 pm
I would feel dirty after I published one of those. You can be certain those kinds of posts will never appear on my blog.
April 12th, 2008 at 3:20 am
This is why I don’t do paid posts, and I hate payday loans, too.
April 12th, 2008 at 5:03 am
[…] weighs in on paid blog posts for payday loans. These types of posts crop up every now and then across the personal finance blogosphere, and I […]
April 12th, 2008 at 6:11 am
I wholeheartedly agree with everything you say in this post! I, too, was solicited for a paid post (”even negative” the email said) and I thought, “even negative, huh” and nearly took the bait.
In the end, I turned down the offer. But I almost fell for the same ruse they sell to their customers: Money now, pain later.
April 12th, 2008 at 11:24 am
I thought the whole point of personal finance blogs was to provide a personal perspective on how to save money or how to spend or invest wisely. I see no place for payday loan sites on blogs and totally agree with what you say Ana
April 13th, 2008 at 1:12 pm
A storefront in my neighborhood started getting refurbished a while back. It’d been vacant for a while, so I was pleased to see something moving in there. It’s just about the closest place to walk to from my apartment, so any sort of useful business going in there would be great.
You can imagine my disappointment when the place turned out to be a payday loan place.
I can hardly think of a more pernicious business. I’m not at all sure I wouldn’t prefer an opium den or a brothel.
April 14th, 2008 at 2:22 pm
Access to credit is a good thing. Payday loans places would be undercut if they could afford to do it any cheaper. I’d consider doing it myself.
As for people doing paid posts in favour of payday loan places, I’m not a fan of paid posts. But if you don’t think there’s something wrong with doing a paid review, and you don’t disapprove of payday loan places, then it’s no worse than writing a paid review about washing up liquid.
April 14th, 2008 at 2:48 pm
Here’s my post of shame:
About 4 years ago an associate and I once considered opening one of these payday loan places.
then States attorney’s around the country started cracking down on them.
You may ask why I even considered it, being a person that was heavily in debt and helps others to get out of debt?
Easy money.
the agreements were air tight and there would be a steady stream of customers.
I really can’t tell you how I felt morally about it then.
Looking back though it was pretty shameful.
April 21st, 2008 at 4:51 am
Payday loans pray on the poor and undereducated. It REALLY should be illegal, it’s a sick shame. 400% interest rates…
May 8th, 2008 at 2:27 pm
What am I to do?
I have shot credit, i am deep in debt, I only have $10 until next payday and i just had to replace a belt in my car. I was forced into getting a paydayloan it tied me over to my next payday where i paid the whole thing off. it cost me $200 and i paid back $200, therefore 0% interest. These companies serve a purpose, and when used properly i dont see the problem.
do you guys all hate McDonalds because if you eat there every day you’ll get fat?
bottomline is its myfault not the companies i got in such a tight spot
May 13th, 2008 at 10:47 am
Your missing the point of these loans…
the only way to get ZOMG 800% interested, is to have them out for the whole year (hince we are talking about APR).
The finance charge for a bank overdraft is much higher when computed as an Annual Percentage rate…
payday loans are a tool and when used properly actually serve a purpose.
July 18th, 2008 at 3:37 pm
I work for a merchant cash advance company that gives cash advances to small businesses, so naturally my perspective on the whole lending industry is a little bit different than that of the author, but I have to agree that it’s upsetting to see how many bloggers are writing paid ads for payday loan companies. Most of them are really terribly written and I can’t imagine that they convince a lot of people to take out a cash advance. Still, it’s a shame to see bloggers giving in to shameless SEO practices at the price of their own credibility. Blame ought to call on both parties.
August 12th, 2008 at 4:09 am
I’d heard the horror stories about payday loans before, namely that they’re very expensive over the course of a year. I was only looking for $100 to help me cover expenses before my next payday; I didn’t want to have to pay two to three times that in interest and hidden fees. So I went online to find out for myself what an online payday loan would entail. I was pleased to discover that it would only cost me $15 for the loan I wanted, and that in the worst case scenario, a payroll advance lender would work with me to establish a short-term payment schedule. Nothing scary about that…
August 21st, 2008 at 11:24 am
Payday loans are one of those things that could go either way - help or hurt. Unfortunately most get hurt. There is a need for the system, as aquiring small loans through anyone other than just-as-bad small loan companies isn’t easy. Just do your research first, and make sure you have a plan to get back out from underneath any loan you get into.