So says Joel Cruz-Esparza, director of consumer protection in the New Mexico Attorney General's Office, in reference to a used car dealer’s practice of opportunity pricing.

Using proprietary software called, Automated Risk Evaluator, salespeople at this car dealer calculate the maximum an individual can afford to pay, then set the price of the car, down payment, and interest rate.

There are no sticker prices.

This results in secured loans with terms like $8,000 principal, $300 monthly payments, and 24.9% APR.

Since these are maximum ability to pay loans, the repossession rate is high. Fifty percent of these cars are never paid off. They’re repossessed, cleaned up, resold, and the dealer pockets the interest/profit.

Sounds more like opportunity fleecing.

Another odious financing practice involves selling personal computers to poor parents trying to help their children compete academically. It co-opts the term, Lay-Away, which used to mean the seller delivered the goods after the buyer finished making modest – interest free -- payments. My mom bought my 10^th birthday bicycle using Lay-Away.

Now it’s likely to mean the seller may or may not deliver the contracted goods after you’ve paid the purchase price, and may not stop deducting payments from your checking account.

Some consumer advocates say these tactics prey on financial poverty and want legislative action taken against these opportunists. I say they prey on financial education poverty. Just because you’re poor doesn’t mean you can’t learn about money. In fact, financial education is probably the poor’s best defense against being taken advantage of. 

Unfortunately, like most simple solutions, this is easier said than done. Does your local high school curricula include a course on basic money management skills? There used to be one for Texas children, but no more. Wasn't rigorous enough for the college bound.

-------------------
Greg Moore is the Creator of the Wealth Building System
'DebtIntoWealth -- Lessons from My Journey to Debt Freedom'

   "My husband is due to retire from the Navy in just two
    years at a young 42 years old, and right around then,
    using your system, we'll be completely debt free, which
    means  we could literally never have to work another day,
    if we choose."    -- Andrea Davis, South Korea

You CAN get out of debt and break the addiction. Click now:
http://www.debtintowealth.com/stretcher.html

 

Greg Moore:

Just because you’re poor doesn’t mean you can’t learn about money

 

I wish I would have said that.

You're right, there is precious little financial education in this country - one of my biggest beefs. It amazes me what a perverted concept of money that many young people have just because they've not been taught how it works and what their responsibilities are.

Couple that with these shady practices (not illegal??) and it's no wonder bankruptcies are so common and people fly from one debt to another without thinking about what they're doing.

 

Greg Moore:

Some consumer advocates say these tactics prey on financial poverty and want legislative action taken against these opportunists.

I hope they get it. There was a time when people like that would have forced out of town. Those who would oppose laws against them are probably making money from them (taxes, loan interest, etc.)

Pat:

Greg Moore:

Just because you’re poor doesn’t mean you can’t learn about money

 

I wish I would have said that.

You're right, there is precious little financial education in this country - one of my biggest beefs. It amazes me what a perverted concept of money that many young people have just because they've not been taught how it works and what their responsibilities are.

Couple that with these shady practices (not illegal??) and it's no wonder bankruptcies are so common and people fly from one debt to another without thinking about what they're doing.

 

Greg Moore:

Some consumer advocates say these tactics prey on financial poverty and want legislative action taken against these opportunists.

I hope they get it. There was a time when people like that would have forced out of town. Those who would oppose laws against them are probably making money from them (taxes, loan interest, etc.)

He is absolutely correct! In fact, for myself, I knew less about money when I had it. Married to a man who used money to control people, including family and friends. When I got divorced, I knew nothing! I learned more by not having any money. Why do you think we see so many people with huge incomes in debt? Sad, but true. So if people could get through that learning process if, and when, they end up with no moneym living in poverty without incurring more debt would be good. But everywhere you look someone is offering an easy or quick way out of debt. Divorce in my opinion creates much poverty.

 katlupe

Dear Katlupe, Divorce is one of the 2 main causes of bankruptcy.  The other is major illness, whether acute or chronic, without health insurance & sometimes with it.

katlupe:

Why do you think we see so many people with huge incomes in debt?

 

I think you're on to something there. When people have money, it's harder to see life without it or to realize that there is an end to it. Spending money is a way of life with no thought of tomorrow's needs and with credit so easy to get, it just feels like more money.

 You're right, Deb, but with some prior planning, money -wise, even divorce doesn't have to destroy one's finances. Major illness is another matter. Our health care system is out of control. It doesn't even take anything major to put a deep hole in one's finances any more, even with insurance.

Divorce, maybe doesn't have to destroy everyone's finances. But for someone not expecting it, or someone already living on a tight budget, it can be devastating. I know, I have been there. I always try to tell women who are married and do not work at a job, and leave all the family finances up to their husbands, to learn about the family finances. To have something to fall back on. But everyone always thinks their marriages will always last. I thought that too. I did not know a thing about our bills or what bank accounts he had or anything. I'm not blaming him, my fault.

katlupe 

 

katlupe:

Divorce, maybe doesn't have to destroy everyone's finances. But for someone not expecting it, or someone already living on a tight budget, it can be devastating

 

That's why I said "with some prior planning." Anything can put your finances into a tailspin if you have no savings and nothing to fall back on. 

My poor husband would be lost if i died or divorced him....he hasn't a clue where stuff is, how much, or how to get at it. He really doesn't want to know. I know he's intelligent and can do it, he managed money on a spreadsheet  before I met him. He cooked too. LOL Not since marriage though!

Cinnamonhuskies:

My poor husband would be lost if i died or divorced him....he hasn't a clue where stuff is, how much, or how to get at it. He really doesn't want to know.

 

I handle our finances too, Michelle.  My husband doesn't want to know either, but I'll try to slip information in sometimes.