This article was written in 2009, before the rapid growth of fintech payday lenders online. At that time, the typical image was a physical storefront offering loans, cigarettes, and lottery tickets. Fast forward to 2025, and the storefront has transitioned to mobile payday apps now marketed as “early pay access.” However, the core issue remains unchanged: these services continue to exploit those who can least afford.
I opened my Ottawa Citizen a few years ago and saw this picture. I was hit by a combination of hatred, anger, and lurid curiosity. It truly is a hideous financial image.
Revulsion and Anger
I feel a strong dislike for the cheque cashing and payday loan industry, which I genuinely believe is one of the most harmful financial services out there. It’s concerning that it’s not only heavily regulated but also continues to thrive. The exorbitant fees and interest rates from these modern-day loan sharks are incredibly unfair, even by loan shark benchmarks. It’s imperative that we advocate for meaningful changes to protect consumers and create a better financial landscape for everyone!
Lurid Curiosity
This is the most impressive entrepreneurial setup I can see. Whoever runs this particular business has nailed their clientage exactly and is pandering to their every whim and need.
- Cheques cashed at a fee
- Lottery tickets sold (and given away as incentives to good customers)
- Cigarettes sold
- Foreign Exchange
- Money Transfers
- Income Tax "Refunds Now!"
- Payday Loans
What other services could they offer?
Hideous Financial Image Commentary
It’s quite astonishing to realize that our community permits such forms of “financial exploitation” to flourish unchecked. Recently, I encountered a predatory practice called a “Modern Day Money Lender” in my neighborhood. It sparked a flurry of questions in my mind. How can such establishments exist among us? We need to remain vigilant and proactive. We must ensure we are informed and engaged. This way, we can work together to foster a healthier and more equitable environment for everyone in our community!
Payday lenders thrive on desperation. They mostly set up shop where incomes are tenuous, banking access is weakest, and people are most likely to gamble on lottery tickets to escape. That’s no accident it’s a business model. The problem I have is they are setting them up in relatively affluent communities, as well.
In personal finance terms, payday loans are like playing Russian roulette with your wallet (5 cylinders are loaded too). Sure, you get the cash, but the bullet of compounding fees is always waiting. The lesson isn’t just “don’t use payday loans.” You need to know where your financial leaks are. Patch them before you ever end up there.
I guess over the next year or two. This may be one of the growth industries along with repossession and bill collection, which is an unfortunate statement about life in general.
FAQ Payday Loans
They carry obscene interest rates, often equivalent to 400%+ annually, trapping borrowers in cycles of debt.
Desperation, lack of access to credit, below poverty minimum wage, and clever marketing that normalizes high-cost borrowing.
Yes, but they’re lightly regulated provincially, with caps on rates that still allow sky-high costs. If you do finally get financial help they rarely enjoy playing along with your consumer proposal or bankruptcy.
Credit Unions, emergency lines of credit, no fee overdraft protection, or asking your bank for hardship options. Better choice might be talking to a licensed Bankruptcy Trustee.
Other Pay-Day Loan Articles
- The Pros and Cons of Using a Payday Loan for Emergencies an article by Hoyes-Michalos. They have seen the impact of these loans.
- Pay Day Loan Mortgages Revisited I think I was kidding here, I hope.
- In Defense of Pay Day Loans? That title is a bit of misdirection as well.
- Pay Day Loans are Crack Cocaine of Personal Finances that title sounds more like it.
- New Pay Day Loan Rules In Place in Ontario in 2007 they didn't help much.
- When to Use a Payday Loan? Never! title explains it all.
- Payday Loans: No, no, no! You get the point right?
Pretty crafty! Do we blame the marketer, or the dumbo who falls for this?
Not sure, but it is still disgusting.
I totally agree that the payday loan business must be stopped. There are so many people in financial problems these days and these financial services keep getting them deeper in the problems.
Well, the credit card industry has moved into the traditional loan shark space, so these guys had to go even farther out.
Neil, I don’t think their terms are all that straighforward, do they advertise that their yearly rates are in excess of 12,000%? Don’t think so.
They are parasites.
It has always struck me that foreign exchange doesn’t quite fit with the rest. Most people in Canada are sending money home, not exchanging it. And foreign currency is usually something that the better off deal with (or at least those with the financial wherewithal to save up for a plane ticket).
I find that I don’t get overly offended at these kinds of places. There’s demand. Their terms are pretty straightforward. And unlike the loan shark, they won’t break your legs. So, while I’d like to live in a world where everyone is knowledgeable enough to not use these services, I prefer the storefront business to the back alley business. More regulation wouldn’t hurt, though.
You must admit, all that neon does add a touch of class to the whole operation. 😉
Sort of reminiscent of the neon “GIRLS GIRLS GIRLS” you might have seen on a seedy strip club, so maybe your “financial pornography” phrase is apt
LOL 🙂 “financial pornography” term expresses it’s true essence.