Understanding Loan Sharks and Predatory Lending

The transcript is a dialogue about the pitfalls of payday loans, highlighting the high interest rates and predatory nature of such loans. It discusses the misleading advertising tactics used by loan franchises and the financial traps borrowers can fall into. The conversation also touches on the legal loopholes that allow these businesses to operate without strict regulations.

What term do loan sharks prefer to be called?

• Financial advisors

• Money lenders

• Credit counselors

• Debt collectors

Which of the following is NOT a name of a payday loan franchise mentioned?

• Money Time 9000

• Cash Quickly

• Quick Cash Loans

• E-Cash-O-Rama

What is a common reason people might consider taking out a payday loan?

• To invest in stocks

• To cover unexpected medical bills

• To buy a new car

• To start a business

What is the approximate APR mentioned for payday loans?

• 15%

• 100%

• 550%

• 200%

If a $500 loan is not paid back for a year, approximately how much debt could it accumulate?

• $3,000

• $5,000

• $2,500

• $1,000

What is one way lenders suggest to avoid defaulting on a loan?

• Pay the loan in full immediately

• Take out another loan

• Negotiate a lower interest rate

• File for bankruptcy

What is a weekly fee mentioned to extend a loan and avoid default?

• $75

• $10

• $25

• $50

What sector are some lending businesses registered under to avoid strict regulations?

• Retail

• Tourism

• Finance

• Banking

What phrase is used to describe the unsafe nature of some lending practices?

• Fundamentally unsafe

• Fundamentally risky

• Fundamentally secure

• Fundamentally sound

What is the reaction of the person when asked to take out a loan?

• They negotiate for better terms

• They refuse and question the legality

• They ask for more information

• They agree immediately