I have been studying payday and title loans advertizing.  A student told me about this web site .  He heard an ad for it on the radio.  The Title Loan Advocates claim to be a “foundation” created to educate the public about the title loan industry.  Their top goal is to help people understand how title loans work.  Their second goal is to help consumers get their interest rate and payments lowered so they can eventually get out from under their “never ending title loans.”  The foundation claims to have saved clients an average of   $2,000-$4,000 over the life of their loans, and tons of customers are quoted on the page as loving this “service.”

 The foundation’s  Q & A page says that title loans are “good for fast cash,” and that many people who use them cannot get loans from banks or credit unions.  The Q & A page also states that there is no interest rate cap for loans of this kind, which can carry APRs of 500% or more, and that title lenders can and do take people’s cars, sometimes after just one late payment.  The page also says that title loans are very profitable for lenders, and that some people do not know the loans are structured as interest-only loans.  The site even tells people how to file a complaint against a payday lender.

So who is behind this “foundation?”  The founders of Money Train, I do believe, though this is not obvious from the web page.  This company has cute radio jingles, here, here, and here,  and is advertising very heavily in Utah and New Mexico, saying they’ll pay you $50 or give you a flat screen TV if you switch your loan to their company, and claiming to have the lowest rates around.  How interesting!  Does this mean that a modicum of competition is hitting the title loan world, even if only to reduce APRs from 500% to the going rate of 300%?