Advertising is a necessary evil. Without it, we wouldn’t get to enjoy our favorite TV shows, websites, radio stations, and all the other entertainment paid for by corporate shills trying to get us to buy new cars and buckets of fried chicken. Because ads help to keep our entertainment flowing, we tolerate them.
Most of them anyway. Every now and then a commercial comes along that’s so vile, so stupid, and so utterly annoying that we’d like nothing more than to track down the parties responsible and beat the holy hell out of them with a tire iron. Commercials like this one:
Western Sky Financial is a company that offers unsecured loans to people who “qualify”. Their advertising campaign focuses on the fact that it’s an American Indian owned business. This implies some sort of tribal ownership, like a casino, which I guess is supposed to give us warm fuzzy feelings. But when you go to their website, you get this giant disclaimer:
WESTERN SKY FINANCIAL is owned wholly by an individual Tribal Member of the Cheyenne River Sioux Tribe and is not owned or operated by the Cheyenne River Sioux Tribe or any of its political subdivisions.
That little bit of chicanery is bad enough, but what really gets me about this company is the terms of their loans. The commercial hand waves this, saying “Yes, the money’s expensive”, and then telling people that they can make it cheaper by simply paying it back faster than the terms of the loan. This is a pretty ludicrous suggestion. If someone is desperate enough to need an unsecured loan of this nature, there’s no way in hell they’re going to be able to pay it back on some sort of aggressive schedule. Not going to happen.
At any rate, they hand wave the fact that the loan is “expensive”. To me, an “expensive” loan would be one that is at, or maybe even above the average APR for a credit card when you’ve got bad credit. According to this site, that would be somewhere in the range of 25%. So let’s give them the benefit of the doubt and double that. After all, this is an unsecured loan that I can get overnight, so paying upwards of 50% APR is probably part of the tradeoff, right?
Not even close.
If you’re quick enough to read through the myriad of legal disclaimers that display through the course of this mercifully short commercial, you’ll spot this gem:
The APR for a typical loan of $2,000 is 130.34% APR with 36 monthly payments of $200.94.
This commercial, believe it or not, is little misleading. When I go to their website the terms are a little bit different. They don’t offer “a typical loan of $2,000.00″. You have to choose between three “Loan Products” of $5,075.00, $2,600.00, and $1,500.00, respectively.
If you want to borrow $2,600.00, you get to enjoy 139.22% APR, as well as a $75.00 “loan fee”. But don’t worry about those loan fees, they tack those right onto the loan. So your loan for $2,600.00 will only get you $2,525.00. That’s fair, right? So you’ll also end up with 47 payments of $294.46. If my math is correct here, you’ll end up paying $13,839.62 on that loan. Neat, huh?
But that’s only if you need over two grand. Let’s say you only need $1,000. Well lucky for you, Western Sky offers you a loan for $1,500.oo. Now $500.00 of that is a “loan fee”, so you’re going to lose that right off the top. You’ll also end up paying 234.52% APR, which equates to 24 payments of $198.19. So you’ll only end up paying back $4756.56 on your thousand dollar loan. That’s a sound financial strategy.
And if you want that $5,075.00 loan? Prepare to shell out over forty thousand dollars paying it back at the normal rate.
Now I’m a pretty big fan of capitalism, and I generally believe that people need to take responsibility for their own actions. If someone is stupid enough to agree to the terms of a contract like this, that’s their choice. But Western Sky Financial really rubs me the wrong way. They use American Indian imagery, and all the guilt that implies, to distract from the fact that the terms of their loans are so awful that usury wouldn’t even begin to describe it.
And I’ll tell you, if I was a member of the Cheyenne River Sioux Tribe I’d be furious to see some jackass exploiting their heritage to try to rip off people who are too desperate to realize how bad their getting fucked. These people are despicable.
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