$5,075 loan from Western Sky Financial will cost you $40,872.72

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81 Responses to “$5,075 loan from Western Sky Financial will cost you $40,872.72”

  1. unit_1421 says:

    Gonna get their land back one foreclosure at a time?

    • wayne says:

      When I saw their commercial, I took note of their “verbal small print”: “Yes, the money’s expensive … but you can keep the cost down by paying it back  as fast as you can.”  Is this enough warning or not?

    • Antinous / Moderator says:

      Gonna get their land back one foreclosure at a time?

      If the borrowers had any foreclosable collateral, they wouldn’t be taking these loans.

  2. Rob says:

    50% fee on a $1000 loan?????

  3. “All loans will be subject solely to the exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe, Cheyenne River Indian Reservation. All borrowers must consent to be bound to the jurisdiction of the Cheyenne River Sioux Tribal Court, and further agree that no other state or federal law or regulation shall apply to this Loan Agreement, its enforcement or interpretation. The loan agreement contains an agreement to arbitrate all disputes in which borrowers agree to waive their right to a jury trial, to have a court decide any dispute, and to participate in a class action lawsuit, and to certain discovery and other procedures that are available in a lawsuit.”

    • dculberson says:

      Does that also mean that they waive their ability to use any credit reporting agencies or collection actions outside the reservation should the borrower not repay the loan?  Oh, no, it’s a 1-way contract and reciprocity is not in their vocabulary..

    • scatterfingers says:

      That shit should be illegal as hell.

    • Jelly Bean Raider says:

      So… can I just walk away from the “debt” if this is only regulated by THEIR laws and territories? Could/Would a US judge back their claims?

  4. semiotix says:

    It’s hard to find out what the precise loan terms from that ultra-minimalist website without actually signing up for a loan (no thanks!). From what I can tell, there’s basically a few ways this can go:

    HYPER-ULTRA-MEGA-SLEAZEVIL: No early repayment option
    SUPER-PREMIUM EVIL: Early repayment penalty
    EVIL DELUXE WITH INCLUDED COMPLIMENTARY ABUSE (for reference): your typical Wells Fargo mortgage, BofA credit card, etc.
    EVIL LITE: Early repayment allowed without penalty

    I’m inclined to give them the benefit of the doubt–after all, these are the guys whose spokesperson says, “Sure, the money’s expensive…” which is a hell of a lot more transparency than you’ll get from most payday or traditional banks. But it’s still like choosing which piranha you want to eat you. They’re charging 100% interest because they only expect every tenth loan to be paid off–the rest they sell to the collection agencies like everyone else.

    • niktemadur says:

      They’re charging 100% interest because they only expect every tenth loan to be paid off–the rest they sell to the collection agencies like everyone else.

      Capitalism at its’ finest, then.  Business as usual.

  5. PrettyBoyTim says:

    Ah! And the current ad I’m getting on BoingBoing boasts: “The UK’s Top Cards for Poor Credit – 35.9% APR”

    A little lower down is an ad for Wonga.com. I just went to their site; they have a representative APR of 4214%.

    It’s depressing the number of new loan shark shops that are popping up around town and being advertised on TV in the UK. 

  6. h4x0r says:

    As an alternative to late fees, Western Sky Financial will accept the following as valid forms of payment: left nut, knee cap, arm/leg.

  7. Rob Gehrke says:

    You must admire the sheer audacity to even propose something which so blatantly resembles what is basically a heist in slow motion.

  8. jimh says:

     Wow. I guess this is the loan of choice for people who are going to take the money right to the casino and WIN WIN WIN.

  9. They DO warn you… “…Yes, the money is expensive…”   So anyone that signs up for this knows what they’re getting into!  That’s more than I can say about Bank of America or Wells Fargo…

  10. Sam says:

    Man I wish usury was illegal.

    • John Vance says:

      On the one hand, it might stifle small businesses and entrepreneurs, but on the other hand, yes it absofuckinglutely should be illegal.

    • bardfinn says:

      Usury is a Judeo-Christian concept.

      Unconscionability in a contract of adhesion is not, in Common Law.

      Common Law is not a Cheyenne River Sioux (or any other Native American culture’s) concept.

      Under Common Law, the land they lived on was claimed, and they were forcibly relocated.

      Under Common Law, They’re considered a sovereign nation now.

      Contracts and treaties with them were often broken. Well, imnsho, They’re exploring how best to turn Common Law to their advantage.

      In plain English: sauce for the goose …

  11. Antinous / Moderator says:

    Is their motto, The Sky’s The (Interest Rate) Limit!?

    Looks like the rest of the tribe doesn’t want to be associated with him/her.

  12. marilove says:

    I actually used pay day loans when I was even poorer than I am now.  Honestly, they came in handy.  It was either that, or get evicted, or have the electricity turned off (and when it’s 110 degrees out in Phoenix in July, that’s not really an option).  I always paid them off right away (once or twice I had to extend once), though.

    The problem is that sometimes there’s just no other fucking choice.

    • MythicalMe says:

       In my day, a payday loan was floating a check for 3 days. More than 3 days was taking a chance it’d bounce costing you $25.

      They can say what they like about the reserve being a sovereign nation, but they still have to answer to the US government and it’s agencies.

      • A Nonny Moose says:

        ” They can say what they like about the reserve being a sovereign nation, but they still have to answer to the US government and it’s agencies”

        No they don’t.

    • A couple of things to point out:

      1. Most U.S. states have APR caps on loan products. This varies a bit (and there are some small exception in certain states), but the standard is 36%. And I can tell you that it’s very difficult (if not impossible) to make small loan economics go around at that rate. The allowable origination fee with that cap is too small to cover acquisition costs, marketing costs, and principal losses. And I think many people – even cynical people – would be surprised at how high the loss rates would be.

      2. There’s one huge exception to what I just wrote, though. And that’s the loophole that’s been written into almost every state’s laws courtesy of the payday loan lobby. Those guys make hand over fist, and they’ve made it pretty much impossible to introduce “admittedly expensive but better than rolling payday” loans.

  13. Stefan Jones says:

    I’m going to guess that Western Sky Financial only ties to that Indian reservation is an address and a business license.

    Oregon used to have lots of places like that, until the state passed some usury laws. They evaporated like dew.

  14. gwailo_joe says:

    Goddamn these guys, and all their miserable ilk.

    “Sure, it’s expensive”=”Hello, I’m here to assrape you!”

    Here is our semi-trustworthy spokesperson.  Here is our ear-worm jingle.  And here is our generic logo and simple to understand catchphrase:

    “We Steal Money From The Poor”

    • bardfinn says:

      Yes, how dare they turn the system that disenfranchised, impoverished, and forcibly oppressed them and their culture, on its ear.

      • Tennnfan says:

        Yes, and what better group of people to take it out on than random poor and desperate people. That’s highly equitable.

      • Steve Taylor says:

        Half the trouble in the world is caused by that sort of thinking: “we” hurt them so “they” can hit back.

        Except what possible connection is there between the poor suckers who get themselves ripped off by these loans and the people who originally stole the land?

  15. IRMO says:

    Bingo halls and cigarettes were one thing. One day the INdian tribes will regret letting their sovereignty be used for things like this. 

    • Antinous / Moderator says:

      Nice broad brush. Did you know that Africa is not a country?

      • IRMO says:

        A bad incident like this can easily affect the legal standing of treaties for every other tribe. Right now common law holds that treaties between the Federal government and a tribe have the same standing as an international treaty. Shit like this can cause federal judges to “forget” that piece of common law. And if that happens, all the tribes will be hurt. 

        • bardfinn says:

          Considering that they are international treaties, the Supreme Court of the United States would have original jurisdiction.

          So … unless the majority of the Supremes opine that district courts can handle treaty cases … your scenario is unlikely to play out.

    • Mister44 says:

      Except this appears to be one person or company – not an official entity of a tribe.

  16. danegeld says:

    Further adventures in “Pot-Kettle” space: This site (boingboing) carries adverts for Wonga.com who charge >4000% APR. http://www.bbc.co.uk/news/business-16520889 

  17. Mister44 says:

    Payback’s a bitch.

  18. Revenge comes with a price ^^

  19. BrotherPower says:

    My dad’s a full-blooded status Indian up in Canada. I remember the joy he felt the first time he leased a small plot of land to the federal government for one of their office buildings. That felt like winning a minor skirmish in the good fight; that was poetic justice.

    This, on the other hand, is fucking gross.

  20. EH says:

    No biggie. Pretty much every religion in the world accounts for people who do this. 

    • bardfinn says:

      Really? Zen Buddhists don’t. Religions in cultures where notions of property, commerce, codified law don’t exist — probably don’t.

      If one’s religion is that one is tied spiritually to a region of land, and one is forced to march off that land, while the forcers do what they please with that land, is it a given that one’s religion condemns holding the forcers’ feet to the forcers’ fire?

    • Mister44 says:

      “Arrrghh!!! Religion Bad! Arrrggglllee!!!”

      Even the predatory tele-evangelists are just trying to take your money – not lock you into a 250% APR loan. This scum-baggery has nothing to do with religion, and really little to do with Native Americans, as much as it has to do with predatory assholes.

      • TestSalad says:

         They call themselves Indians (not Native Americans) so I assume they’re not native.

        • Mister44 says:

           ?? Who is “they”. The image at the top says they are “a Native American business”.

          But they(we) do use the word “Indian” still. Same thing. It isn’t taboo like the “n-word”. For example there is the “Bureau of Indian Affairs”.

  21. inness says:

    What’s horrific are all the comments on the ancillary sites talking about/seeking answers for why their loans are apparently going to be the One Big Thing which fucks up the rest of their lives. Comments like “Is this legal?” and “But they sold my loan, so I only have to pay back the principal, right?” That last statement right there is a surefire indicator the victim never went to college, or they’d be damn well familiar with the banking practice of selling loans to the highest bidder. It’s a shame seeing folks introduced this way to the Screw You/Pay Us system which is modern America.

  22. Blaine says:

    I’ve probably taken 5,000 personal loan applications for a traditional bank. Honestly? The vast majority of the applicants will be declined, and it’s usually for credit history problems.

    If there is no collateral, the risk is higher – and not for reasons of ‘repossession’ or anything insidious like that. It’s just people tend to pay their housing and automotive bills first. It’s a priority. Don’t believe me? Call up a bank with a house you own outright. No mortgage no nothing. Then tell them it’s a rental property. See how far you get. The difference between “this is my home” and “this is a house I own” is leagues wide.

    You can find a lender willing to give you a first time loan through the Community Reinvestment Act provided you are employed and can prove you can pay a monthly bill (a gas bill, electric bill, cellphone bill, rent bill, a litany of non-traditional credit options).

    But once you’ve sufficiently destroyed your credit, you run out of options. I’m not defending Big Sky, I’m just saying I get it.

    Yes it will cost you $40,000 to borrow $5,000 – 100% interest per year over 8 years adds up. But as a company? Considering they accept so many people that banks wouldn’t touch.

    How many of those $5000 loans will Big Sky never get back? No percentage would surprise me.  What do they lord over the head of people they lent the money to? We’ll ruin your credit?

    Friends and acquaintances who’ll ask me about borrowing money as a personal loan, I tell them the same thing. If you don’t have the credit… Go to a pawn shop. There’s a stigma attached to a pawn shop, but for borrowing small sums of money, the rates will be much better. 

    I’m not defending predatory lending. Far from it. But what I’m saying is, everyone has a shot at cheap money. Youthful indiscretions, medical problems, messy divorces and an innumerable set of scenarios up to and including not-paying-your-bills can make it so your only choice is predatory lending. 

    Make it illegal and you’re not going to hurt Big Sky – they’ll still have money.

  23. Palomino says:

    I guess entire tribes are individual people too. Nice twist.

  24. crimpers says:

    Can’t believe that the rates are the same in New York as in Alabama!  That’s gotta count for something.

  25. Marc Mielke says:

    If the same tribe also runs a casino, that’s friggin’ brilliant. Loan the money to compulsive gamblers, who spend it all at your place. Rinse, wash, repeat. 

  26. John Stephens says:

    Three hours and not a single scalping joke?  I’m impressed.

    • zombiebob says:

       I’ve bought scalped tickets at a lower mark-up! Though that’s not really a joke, as I’ve never bought a scalped ticket. Plus statements aren’t always funny.

  27. equidae says:

    What’s the big deal, dude said it’s expensive right there in their commercial. The worse you could accuse them of is understatement. The most offensive thing you could accuse them of is having a stereotypical head-dressed chief, rubbing his palms together and quietly hissing excellent from the comfort of his large overstuffed, buffalo leather upholstered chair, like some redman version of mr. burns.

  28. arbitraryaardvark says:

    $75 orgination fee plus about 2% per week. Seems legit. When I loaned my friend $50, I told him the first week’s free, after that it’s 15%/wk. We both knew he was never going to repay me. Now if you can’t pay it off early with no penalty, that’s a problem.

    The borrow $1000 package is a little iffier. $500 fee, 4.4% per week.

    • David Huss says:

      I think the second one is a bit of psychology to make the other loans seem like a good deal. I highly doubt anyone actually takes the $1000 deal. 

  29. hornwalker says:

    Seems fair.  At least they aren’t promising us free money, then taking us to a field and killing us.

  30. Might be a good way for an up and coming gang to finance a guns and crack deal. Success and you can pay it off in a week and avoid all those charges. 

  31. asterios9 says:

    When I first saw these ads I was SO intrigued by the line “the money is expensive.”  Why did they put that in there?  There’s certainly no advertising principle that would recommend it.  Perhaps it was an effort to say something brief and intuitive rather than drown the (presumably uneducated) viewer in a bunch of annoying disclosure about rates?

    (Maybe drug companies could get away with this.  “Sure, there are side effects, but for most people…”)

    Anyway,  I actually saw a Big Sky ad on late night television the other night and…they didn’t say it.

    • Steve Taylor says:

      > There’s certainly no advertising principle that would recommend it.

      I reckon there is – by saying the money is expensive they’re lowering the facade of formal big business talk and showng you the just-plain-folks behind it, which causes you to feel a warm fuzzy and decide to give them all of your money.

      Actually one of our local ISPs is doing that at the moment – they’ve got a campaign which say something like

      “Our Christmas cheap-sim deal has been extended (yeah ok – we couldn’t sell them all at Christmas).”

  32. Jon Bakos says:

    Before we start being all racist (too late!) these are the same loans that CashCall’s been offering for years.  Notice the carbon copy of the $5075 loan here: 
    http://www.cashcall.com/Rates/CurrentRates.aspx?tab=1 

    See?  White people have been ripping each other off like this for years, so it’s OK now.

    • SamSam says:

      Who was racist? What comment even made it sound like only non-White people run payday loans?

      You read what you expect to read, and you expected to read racism, I guess.

  33. James Penrose says:

    Since only a terminally stupid person would take such a loan, why does anyone care?

    The numbers are all there, out front where you can see them.  If you can’t figure out it’s a bad deal, you probably should not be allowed to carry money or handle anything sharp.

    I am curious if it is really owned and run by Native Americans or if they too are getting ripped off.

    If they are cashing on on stupid Americans, that’s cool considering what we did to  them in the first place.

    • Steve Taylor says:

      > If they are cashing on on stupid Americans, that’s cool considering what we did to  them in the first place.

      Would it be cool if I ripped you off for something your great grandfather did to  my grandfather? Just checking.

      • Antinous / Moderator says:

        Well, if my great-grandfather stole your great-grandfather’s house and I were living in it, you’d have a pretty good case for seeking redress.

  34. liquado says:

    One thing to consider is that this company may actually be TARGETING the American Indian (ugh, I hate that word) population, as many do in Canada. As one of the poorest demographic groups in the country, we see many companies targeting First Nations people with similar high-cost financing deals (though not quite as egregious as this). The tag line about being attached to a tribe is likely meant to convince the aboriginal population that this is support from their own people, thereby making it a “my own peeps wouldn’t screw me!” sale.

  35. Ipo says:

    I’ve been wondering where Greece borrowed its money.

  36. jwkrk says:

    “The magic of compound interest.”

  37. Tom says:

    I’m saddened at the people calling for this to be illegal. I thought we BoingBoing readers were staunchly in favor of personal freedom. But now you want the gov’t to protect people by making their financial decisions for them?

  38. artbyjcm says:

    I really need a new computer right the hell now… this is looking pretty tempting… Tell me, Internet, should I do it? lol

  39. Urof says:

    No, it shouldn’t. They should be able to charge 500% if they want to. It’s America, it’s called Capitalism.

    Let the consumer decide. If they want to pay that interest, go for it. If people aren’t interested they would have to lower the rate.

    The borrowers are adults, not children. Fuck them if they are stupid enough to pay that.

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