A debt-collection machine that’s chewing up small businesses across America
bloomberg.com
bloomberg.com
That being said - one thing stands out, as it often does with this sort of story. There's often a turning point that should make any one of us scratch our heads and learn for the future. This was it for me:
"The Duncans’ ordeal began in November 2017 with an unsolicited fax from a broker promising term loans of as much as $1 million at a cheap rate...The spam fax felt like a gift from God."
That's the moment right there that should scream RED FLAG RED FLAG RED FLAG to everyone. Spam never delivers a gift from the heavens. Never. Never. Never. This is the same sort of thing that 409 scammers bank on -- desperate folks that think they're just the luckiest darn people on earth for happening to get this great deal right at their feet. This is not how the world works.
It goes on...
"Without talking to a lawyer, they did. Why not? Doug thought. They intended to pay the money back on time."
Red Flag #2.
"This would continue for about three months, until they’d repaid $59,960, amounting to an annualized interest rate of more than 350 percent. A small price to pay, Doug figured—soon he’d have all the money he needed in cheaper, longer-term debt."
And again...
I'm not blaming the Duncans here entirely, but this situation was avoidable. I hope everyone here on HN reads this tale and learns from it for your own businesses / life experiences.
One errant employee can fax blast once and wreck an entire company.
At the top, there's a lender. In this story, the lender is Yellowstone. The lender actually gives money to the customer.
A lender like Yellowstone has 200+ brokers they work with. The brokers are independent companies - "Business Lending LLC" or some generic name.
The brokers do whatever they can to find customers interested in a loan. They package that customers info into a loan application, and send it to Yellowstone. Yellowstone then decides to fund it or not. If they do, the rest of the contact is between Yellowstone and the small business borrower.
How does the borrower know which broker they worked with? Fax letterhead? Fake generic business name. Email of the rep they worked with? Possibly some random gmail. Etc. They get super unlucky and get fined? Declare bankruptcy, make a new company called "Business Lending 2 LLC".
It's not impossible to catch these guys, but it is hard enough to enforce that no current agency is especially interested.
But those fine/regulation doesn't seem to stop the telemarketers.
Any idea on why that's the case?
The gov agency is not enforce it? The lawyers can't do class action and make $ from filing those cases? Can they file any cases against AT&T or other phone companies? The spammers are outside the US?
Who pays in the following situation:
Company A fax-spams people.
Answer: It should be Company A, right? Good.
Now how about in this following situation:
Company A is legit. Person B doesn't like company A, and decides to make fake adverts and fax-spams people using a voip circuit.
Does Company A pay, because it was abut their products in a spammy manner? Or do they find who did it, and try to determine Person B?
In all seriousness... how do you protect naive people from scams like this? I guess my despair is that: you might protect them from this obvious scam. What if the scam is a little more polished?
I think this kinda thing will always happen to gullible folks. I'm not sure what the solution is.
Only if we are willing to say the same once someone decides to fight back with actual force. If someone outright kills a scammer doing this, are you willing to write it off as "Darwin's law" and let it be?
In this case, you stop government enforcing the scam.
You could say "Darwin", anyone dumb enough to get eaten deserves it.
But you could also say "anything that eats people is gonna get shut down hard", because you don't get to be at the top of the food chain if you let things keep eating you.
I do feel for people in this situation, particularly those who are driven to the home equity loans due to unfortunate events, like cancer, in their personal lives. But I feel that it needs to be said that there's a not insignificant number of people who are caught in these situations precisely because they failed to plan and have contingency money set aside, instead spending to keep up with the Joneses.
and
>due to unfortunate events, like cancer, in their personal lives...
I think it's a bit idealistic to think most Americans can save up to take care of a potential bout with cancer. Particularly if they are unfortunate enough to get certain varieties of cancer.
It's like a Manhattan penthouse. We can save for as long and as hard as we like, but for most Americans that purchase is just going to be out of reach. That's just life here in the US when it comes to cancer. The treatments are expensive and out of reach for most of us. Insurance can make it a bit better, but at the mean, we'll still have some pretty serious problems paying for the treatment.
Also, you only double your money every 3 months if none of your loans default and you collect everything. Most of these loans default. Profits are way slimmer than you're imagining, even for the scammers (Who I definitely agree should be punished for these practices).
One insurance company had a plan with a ten-percent MLR! (Marketing plans that didn't cover anything to college kids, of course.) They took in premiums and kept ninety-percent of it as profit.
Imagine writing some really bad code under an extremely tight deadline. You know it’s a bad idea, you know it’ll be miserable to maintain, and that it’s a very brittle solution, but you write a few all-caps comments around it and a self-deprecating joke in the commit message, and resolve to refactor it once the deadline has passed.
The process of taking on bad tech debt is very, very similar to the process of taking on bad regular debt.
When your payments will be $800 per DAY I don't understand how the cost of having a lawyer look it over is of any consequence.
I wonder if part of the Yellowstone MO was to use fax? Over email, you have to compete with the Nigerians, Russians etc, somehow fax would seem a little more legit.
Sad story this. I hope the victims can achieve some sort of redress.
They look for people who are both desperate and also naive or gullible or unrealistic or something. I spent nearly six years homeless. I was also extremely ill at the time. I absolutely was desperate.
I also refused to be sucked into certain things. No, I was not going to sleep with someone for money and risk getting AIDS, being arrested, etc and having my problems become drastically worse. No, I was not going to accept an offer of temporary housing that came with a huge and obvious downside that well could have left me in much worse straits than I was already in. No, I was not going to make use of homeless services that expected me to leave all my worldly possessions, including my computer that I could not afford to replace, in an unsecured area where anyone could walk off with it.
I looked for options that had clear and obvious benefit without huge fuck you potential.
However, I do wonder if their lack of caution may have helped their downfall to begin with. Housing isn't like tech startups. You can't just "grow at all costs" by hiring 50 employees and taking money from anyone and everyone.
You can't think a fax is a gift from God if you don't think there's a God, for example. And you won't be as predisposed to look at it as a break for you, if you don't think you "deserve" a break (or to be rich, or to be in business at all). And you immediately see the downside of any loan, the second you consider "Hey what if tomorrow isn't more flush than today?"
Protestant theology actually says the opposite of "you deserve blessings", historically. The "five solas" of the protestant reformation include "sola gratia" (salvation only by grace - undeserved good treatment), and "solus christus" and "sola fide" make similar points.
Certainly "prosperity gospel" teaching is rampant, but it has very little to do with the Jesus of the New Testament or with historical Protestantism.
> You can't think a fax is a gift from God if you don't think there's a God, for example.
You also wouldn't think that if you read the Bible much.
- Proverbs 13:11 - Wealth gained hastily will dwindle, but whoever gathers little by little will increase it. - Proverbs 22:7 - The rich rules over the poor, and the borrower is the slave of the lender. - Hebrews 13:5 - Keep your life free from love of money, and be content with what you have, for he has said, "I will never leave you nor forsake you."
You can find many examples of professing Christians (or atheists) doing stupid things. That doesn't necessarily mean that Christianity or Jesus is the problem. It's more often that they don't follow what they claim to believe.
No one signs up to a loan charging 350% annual interest who is not desperate.
No doubt the arrangement is structured in a way that also circumvents usury laws of various jurisdictions.
The confession of judgment form is an integral part of the abuse inflicted on borrowers here. This is indeed a long-standing legal vehicle, perfectly legal in itself, by which a lender can go to court and get an ex-parte judgment (that is, a judgment following an application process by which only one party appears and no one is there to oppose the application or contest it in any way) in highly expedited fashion. With a confession of judgment, actual review by a judge is bypassed altogether in most cases and a clerk performs a ministerial act to enter it. By ministerial, I mean that no one attempts to evaluate anything other than to determine that the form itself is indeed a confession of judgment and that is it signed by the party purporting to confess judgment. Once such a judgment is entered, it has all the attributes of any other judgment and can be used to seize assets and otherwise employ the full range of means by which it can be enforced against a judgment debtor.
A confession of judgment can serve a legitimate purpose. Very often, when litigation is settled, a party cannot pay a given amount in full but agrees that he owes it and promises to pay it over time in installments as part of the settlement. Rather than entering into a stipulated judgment that becomes public record to document the debt, the parties will agree, in effect, to keep it off the public record by signing both a formal settlement agreement and also a confession of judgment providing that the debtor confesses judgment for the full amount of the debt. The settlement agreement will in turn define the conditions by which the confession of judgment may be filed and an actual judgment obtained. Typical terms provide that it can in no case be filed as long as payments under the arrangement are being timely made but can be filed (either with no notice or with a very short notice) if the debtor defaults under the arrangement (even then, any payments actually made must be credited to reduce the amount of the balance that becomes part of any judgment). If the debtor pays everything off in full and on time, then the confession of judgment can never be filed or used in any manner. If someone tries to file it and obtain a judgment contrary to the agreement, severe consequences follow to punish the party abusing the process.
That sort of limited use is helpful in resolving disputes while limiting harm to debtors who wind up having to sign such things. Attorneys are typically involved who, in effect, assume fiduciary duties not to abuse the process. In this sense, and for such uses, the confession of judgment is a tried, tested, and useful part of our U.S. legal system. It goes back many decades, if not centuries, in the English common law.
In contrast, what is described in this article makes a mockery of our legal system. There you have a shady business that incorporates the confession of judgment into every loan as a matter of routine and effectively sets up a process where even a minor missed payment can result in devastation and ruin to a debtor with no notice, no opportunity to be heard, and no defense. When you add to this their institutional practices of conveniently fabricating evidence to justify use of the confession, you turn the full force of the law against a hapless and defenseless debtor who innocently assumed that normal loan rules would apply.
If this is technically legal under New York law (don't know), it is a practice that can be banned by legislative action. There are all sorts of cases in which a technically binding contract is nonetheless barred from enforcement because it violates public policy. I suppose there may be arguments on the lender's side to support this sort of practice but I can't imagine they would be compelling. Time for lawmakers to apply a fix either by banning the practice or, at the least, by requiring some strong form of disclosure of the risks.
Of course, the real issue here is the problem with being a desperate borrower. The more life experience I get, the more I am dismayed by how vile people can sometimes be. It is truly depressing to watch.
And so people don't read them. You can't.
When my wife and I sat down to buy our first house, we planned to read every document before signing it. The mobile notary they sent to our house was aghast. He was like, "Uh, I guess if you want to try, I can leave these here and try to come back in 8 hours or so, but obviously I will not stay here while you read everything you sign." Even if we had read it, what are the odds that we could've found some gotcha clause dressed up in weird language in that mound of documents?
When the status quo is for people to sign documents that they have not fully read or understood, things like this are going to happen.
There are a couple of solutions, neither of them perfect:
1. We need lawyers-in-a-box that can protect us from the most outrageous abuses. You should be able to point your smartphone at a Confession of Judgment and your phone should make a big red X and say, "WARNING! This kind of document is considered predatory! Exercise extreme caution before you sign it!" (You should also be able to get one that would tell you that the non-compete they want you to sign in California is not binding, that this contract contains a mandatory arbitration clause, and other things like that).
2. But that would only help a little bit. Ultimately, we would need to really rework the legal code in ways that I think everyone is more than a little uncomfortable with.
The subprime loan fiasco, a good portion of people could make normal interest rates on mortgages, but most had arms with big baloons. Many people re-finance their homes thru the government, with normal interest rates.
If you are making your payments, why would you think the loan would be called in all at once? Its a scam, thats why.
It's even worse than you say. Standard english words have secondary meanings as legalese. You might read "The cat sat it the box" and think "Ok, I know what this means" or maybe look up the bits you don't know in a dictionary, only later to learn that "sat" has a special legal meaning in your jurisdiction.
You literally can't read these yourself because everything has special hidden meanings that you won't even know exist without special training.
tldr casebrief: https://www.casebriefs.com/blog/law/contracts/outline-contra...
More details & quotes: https://h2o.law.harvard.edu/collages/2981
The notary sat there as we did it, and it certainly didn't take multiple hours to do so.
While I might understand a lender needing agility to act quick if they think a borrower is failing, a rubber-stamp immediate default judgment is outrageous. More so is the notion that a form-filled template is worth a $9,900 legal fee (which is likely why they chose this route -- retrieving the capital to lend to someone else and filling a bit of business for their bottom-feeder in-house lawyer made it a net win)
I always thought this was a stupid, overly expensive and bureaucratic process when incorporating a company. However, for a house purchase contract it was surprisingly useful (but still ridiculously expensive...notary costs here are more or less a fixed percentage of the transaction worth).
Real estate purchases in England still have a number of surprises for which you have to retain a solicitor, but in Scotland the system is almost entirely standardised.
(Real estate involves not only surprises in or below the building but in feudal or other attached liabilities or easements (e.g. "chancel repair liability") - and don't get me started on the US weak title system)
I am constantly amazed at how much 'boiler plate' stuff needs to be re-defined in each and every contract (at least in America). It's as if the concepts of a standard contract, where one thing is exchanged for another or payments are made on a term, doesn't exist.
This is nuts. It says "they HAVE TO sign a statement giving up their right to defend themselves if the lender takes them to court." (capitalization is mine).
Does anyone know if the borrower can refuse to sign and still get the loan?
Also why is this arcane clause still in the loan docs? And do mortgage loans also have this?
It’s a testament to the miserable state of financial education, poor regulation, and even a corrupt legal system that is willing to even entertain such a document.
Allowing a document like this in court is like letting desperate people sell their organs for cash. It stinks to high heavens, and it seems obvious there’s plenty of fraud at Yellowstone for a decent honorable DA to bring down a hammer on these guys. But will they? Don’t hold your breath.
Practically speaking, it's still not possible for most people to defend. Lawyers cost money, and you're trying to sue who just took all yours.
However this isn't really about financial education. For many people, if there's even a slim hope of a business succeeding, the fees and risks associated with an absurd loan are preferable to being forced to close the business. The anecdotes are almost always of the form "we just needed a small liferaft until business picks up. Once business is good, we can pay it off." That's human nature to an extent.
They curiously tend to avoid mentioning that, 9 times out of 10, that sort of behaviour ends up in bankruptcy and tears.
They start as one entity's predatory practice, but when they work in court, they spread rapidly and become a standard that you simply have to deal with.
Edit: This is also a world where student date can never be discharged because that's what the lenders wanted and they wrote the law.
This is where a contractual fulfillment tracking system would be useful, a matter of public record as to whom is paying whom and if the other side(s) in the transaction held up their end of the deal. The sort of thing that witnesses would sign; like your bank, their bank, and regulatory organizations (for some special or large value transactions).
“B(4) it must have been executed after the date or dates when the sums described in the statement were due.”
I am assuming most states share this rule, but I could be wrong.
- we require you to pay off any outstanding auto loan. we can help finance this
- even if we don't, we require first lien on your existing auto vehicle (which must be less than 7 years old, less than 50,000 miles)
So if you default, they can take both your cars...
I once missed 3 payments in a row during the last 6 months of a five year car loan (never missed any other payments). OK, not great, my bad (hey, I was broke). The GMAC loan company then set The Machine in action. My car was repossessed as one would expect. However, everything was stacked against me recovering the car: It was sent 100 miles away to be auctioned off, with any amount of the loan not covered to still be owed by me. Yes, they could sell the car for $10, and I'd owe the rest. To get the car back, I needed to pay off the rest of the car loan in full, plus interest, plus penalties, plus "storage" fees (per day - this really pissed me off), the city of Menlo Park charged me with something as well because of the tow, and I had to get myself out to Vacaville somehow and go to the regional distribution center with all the paperwork to get the car.
This happens so infrequently, the people there were shocked when I showed up (I had gotten a loan from a friend, and spent a week on the phone getting it done before they auctioned the car). Standing in the line with all the dealers looking for cheap cars at auction and repo men who just arrived with BMW's they just stole (ahem, recovered) that morning. It was surreal. They had my car in the middle of a sea of other repossessed vehicles parked bumper to bumper. It took them an hour or so just to fish it out. All my possessions in the car had been thrown away.
This doesn't compare to the horror stories from the subprime loan craziness, nor the abuse in the article, but it just shows that when you take a loan, you are at the mercy of the lender, and they are never merciful. They are normally giant corporations who farm out the work to thousands of happy conspirators who make a living from other people's misery, justifying it because the person who took the loan must somehow deserve the treatment.
I quickly pulled the cash together (it was on the cusp of a large payment coming to me) to buy it out and pay penalties and encountered a very similar experience to you. I immediately demanded to buy it out to be told I had to wait until they "calculated the amount owing". This simple bit of arithmetic took almost a week, during which they were charging me something to the tune of $200 a day. Finally they gave me the pay out amount so I headed to the fortified bunker where they keep the vehicles -- some gray building in an industrial park surrounded by giant fences -- and an employee saw me so I said I was there to see the guy who told me to come. He walked me into their bullpen and when the guy realized who I was it was like they thought I was going to shoot the place up. It was apparently a major security breach for them, all while I could hear their lines of employees doing what sounded like credit sales calls (I guess they multipurpose).
Every single penalty was grossly beyond any reasonable amount (every player in this scheme wanted their pound of flesh), but I paid it all and got my SUV. Found out later that one of the airbags mysteriously went missing during this period.
They can get away with this because as a society we have a sort of moral attitude about debt. A "they had it comin'" attitude that many people have, until the system turns on them.
I forgot to mention I was broke because of my own self-financed startup as well, which didn't work out. (It turns out, I'm a horrible business person. Happily, I was able to sell the assets of the company to a BigCo for a small amount and pay off my debts.)
Lessons for future entrepreneurs in debt: You can ignore the daily credit card robo-calls, make arrangements with your landlord and the electric company, but they'll come for your car faster than you think. (They grabbed mine the day after Christmas).
I have a stretch in the past where my landlord filed on me 4 months out of the year and I pulled together the funds to pay rent + court costs + filing & lawyer fees before the end of the month...
Also had Electricity turned off and that requires paying bill in full + deposit, so usually close to double your bill, or 1.5 times if you owe 2 months. They sure take their time turning it back on too. (edited to fix formatting)
If you go into a bank, completely unarmed and pass a note to a teller demanding money, you'll be locked away for years for stealing what in most cases is only a few thousand dollars. Whoever forged that document stole ~$60,000 and no one seems interested in doing anything more than issue a sternly worded "don't do that again".
What is it going to take to get society to get its act together and actually start enforcing the law when it comes to white collar crime? If the details of this article are correct, there are several employees of Yellowstone capital that should be thrown in a jail cell for a substantial amount of time.
The worst part is, is that there is a viable market for short term business loans that don’t involve APYs over 300% or loan snarking, or counterfeiting legal documents, or plundering unrelated accounts, or exploiting every legal loophole known to man and lining the pockets of NY “marshals” while you’re at it.
The level of corruption is mind boggling. I’ve often wanted to learn more about the industry and was very interested in the rise of P2P lending, but when you have to compete with scum like this, obviously that makes it near impossible.
Just like making drugs illegal doesn't make them go away, making unethical lending illegal doesn't make it go away either. To me, this is "harm reduction" of financial services. Yes, it's bad, but not as bad as leaving it on the black market.
Organized crime is way down, compared to what it was in the past. It just isn't a problem anywhere in America
Yes, there is... but there are still people who those reputable lenders won't do business with because the risk is too high for the return. Those high risk people are the ones these predators are lending to.
A whole lot of people - not just the principals but also the legislators, judges, clerks, and bankers who enable them - should spend the rest of their lives in jail for this.
Courts in NY are executing these blatantly unfair contracts, after other courts all over the country decided they were blatantly unfair, and you're blaming deregulation?
I will definitely be writing to my state reps to outlaw this practice.
Also, the fact that NYC enriches someone responsible for helping this is shameful and inviting corruption (though it is unsurprising to me that this is the norm here).
https://jalopnik.com/how-a-subprime-auto-lender-consumed-det...
Well, that's diabolical. Wow.
Duncan was running a struggling Florida real estate agency with her husband, Doug. She began each day in prayer, a vanilla latte in her hand and her Maltese Shih Tzu, Coco, on her lap, asking God for business to pick up.
This was the first line that made me feel they are just not very good business people. Praying to god for business to pick up instead of starting the day searching for ways to improve the business sounds like the exact sort of thing that "No one plans to fail, they just fail to plan" quote is aimed at. She's just kind of hoping things get better.
The couple had owned their agency, a Re/Max franchise, for three years and now had 50 employees, but they still weren’t turning a profit.
See, I don't get this. How do you have 50 employees and no profit? I don't understand that.
We clearly need better support for small businesses in the US. Small businesses are frequently being run by people who simply cannot compete with corporations and otherwise successfully "swim with the sharks."
We also need better support for micoenterprise -- for businesses with fewer than the ten employees that you need to qualify as a small business. The lack of good support for that sector is part of what is wrong with this country. We haven't created such support and I feel it is destabilizing the country.
Everything is "go big or go home" and that simply isn't healthy. It's fine to have some folks shooting for the stars, but that shouldn't be the only viable option.
Ask Uber? :-) But Silicon Valley jokes aside, you can have a small business where the amount of money coming in pretty much exactly matches the money going out, and that is essentially no profit. For a real estate business, most of those employees would be brokers who would make no salary but would make a piece on the commission of each sale. So the percentage of the commissions that the agency kept covered rent, and admin staff, and maybe a salary for the principals.
I also found ways to make money on the internet while homeless and that helped get me off the street. It was critical that it actually turn a profit for me. Low pay was acceptable. High through-puts of money -- some going out and some coming in -- without a real profit absolutely was not acceptable.
So while I'm well aware of Twitter and Uber and all that, I cannot fathom running a small business that doesn't turn a profit. I just don't get that. To my mind, that makes no sense. Why on earth would I do that?
To my mind, you find something that is actually profitable and then grow it. It seems to me there has to be something wrong with a person's thinking that they take on 50 employees and still don't make money.
I just cannot wrap my brain around such a choice. I look at what I read and I think the people running the business, who were praying to God for business to improve -- presumably instead of actively researching how to make things work better (I realize you can do both and that assumption could be in error, but I can only go by the info included in the article) -- must have been doing something wrong in some important way.
That makes a little more sense to me.
Prayer is not necessarily contradictory with action, and the optimistic mindset it enables for some people can be invaluable in stressful situations.
There's plenty of "WTF?" to go around in this article, the usurious interest rates, the confession of judgement, and that people are falling for this.
I am sadly not surprised that the banks are offering up their customers funds if said bank has an office in NY, even if not based there. I imagine the banks' legal departments are risk averse and consider that they'd have more to potentially lose fighting such bogus claims than just offering up their customers' money, whether said claims are legitimate or not.
IMO, the New York practice of the marshals is some abuse-ripe legal cruft that needs to go.
I do find myself wondering if remedy for this couldn't come from a federal angle. The US Constitution says that once affairs cross state lines, they become a federal issue, plus there's Wickard vs Filburn that's been used to make anything a federal issue if the fed wants it to be. I wonder if claims of violation of due process or the usurious interest rates could be used to smite Glass and other predators in this financial space.
I'm currently working on a startup to solve the access to capital problem for local small businesses (mainvest.com). Open to any feedback or suggestions on how we can tackle this issue. We're currently based in MA, but we're planning on bringing our product to NYS soon. Hopefully they've fixed "confession of judgement" before then.
They basically wanted full control of my bank account and my credit card processor, and wanted the loan repaid at $100 a day and at a 50% cost.
The guy calling me got really pissed when I told him I could increase my product prices by 3% and raise the loan amount they offered over the same period as the loan, interest free.
I run my company with Quickbooks Online, and they have a "feature" called QuickBooks Capital, where you can secure short term loans at not terrible interest rates (~10%), and they report your payment history to your DUNS number, building your company's credit history.
I take out $20k every 6 months and pay it back weekly over their 6 month payment window and end up paying something small like 4-5% interest on it.
Yes, they are meeting a need, I can't fault them for that. But their heavy-handedness and general over-focus on the their bottom line begs to be taken to the mat and punched in the face.
Certainly there's got to be someone reading this who can make that happen. TIA
Due to the oddity in how you pay, and the use of factor rates, it requires knowing your business really well to understand what the APR will be. And the better your business does, the higher the APR as you will pay the interest sooner. In contrast, a traditional business line of credit, you will typically have an upfront APR and doing better means you pay it off sooner and pay less interest.
edit: and to be clear, I'm confident that Square doesn't do the scammy practices in the article.
where is the boundary of validity between "sign here to waive your right to defend yourself" and "sign here to waive the right to keep your head (i.e. decapitation)" legally defined?
is it possible to sign and allow a person to decapitate me? if not why not? and why is the right to defend yourself not similarily protected?
it seems at some point both bankers and judges expect civilians to subjugate themselves unconditionally...
perhaps they can soon apply it to consumer loans as well, claiming the consumer failed to register as a business towards the government?
it's like Alice in Wonderland where she or someone else is accused of writing a letter, but after pointing out it's not even the accused's handwriting, this is viewed as cementing the malicious intent when the accused supposedly wrote the letter...
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1,976 posts 22k followers 1,117 following
juan_ZILLAA
Something like a " Wall Street wolf "
2014 Alpha 12x GTR
2015 Range Rover sport
2016 Lamborghini Huracan
2018 Ferrari 488 spider
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Looks like he's made a few millions and fancying himself as a Wall Street player.
Putting people put in positions like that and sending gloating "I will f you up" messages is almost an invitation to be murdered, to people who are about to lose everything.
How? Aren’t retirement accounts protected by ERISA?
Fwiw, Zach Mider won a Pulitzer in 2015 for his explanatory reporting on US corporate tax evasion.
Perhaps Confessions of Guilt should have an expiration date like that it must be filed within 7 days of being signed or it's invalid.
This shouldn’t have happened in the first place, regardless of how naive the borrowers were.
The two Bloomberg links I see on the front page were directly referenced in his column today.
Did you ever think you would read such a sentence - and that it would be real?
> The advance turned out to be for $36,762, repaid in $800 daily debits from their bank account starting the day after they got the money. This would continue for about three months, until they’d repaid $59,960, amounting to an annualized interest rate of more than 350 percent. A small price to pay, Doug figured—soon he’d have all the money he needed in cheaper, longer-term debt.
totally speechless. $800 in DAILY payments, at 350% interest, for a TRYOUT loan that he didn't even need, in order to get a bigger loan of $800K. FROM A SPAM FAX. And to top it off - they didn't talk to their lawyer, or (i assume) accountant.
> Jerry Bush, who ran a plumbing business with his father in Roanoke, Va., signed confessions for at least six cash advances from companies including Yellowstone, taking one loan after another as his payments mounted to $18,000 a day.
A day! how could any small business handle that?
This is just heartbreaking. While these were horrible (or desperate) financial decisions - it's not their fault for being victims. This is what laws and regulations are for. We can and will eventually stop this from happening. I think this being a series of stories will help give it the spotlight it needs.
how do people get tricked into agreeing to terms like this