TruthOut has the article The New Financial Scam Driving Workers Deep Into Debt.
This new loan scheme is being promoted as a “service” by unscrupulous employers working in cahoots with predatory lenders. The employee can ask for an “advance” and the loan is included right in the paycheck. These loans are great for the lender because payments come straight out of the employee’s paycheck. The loans are terrible for the employee because payments come straight out of the employee’s paycheck.
Workplace loans have very high interest rates, as much as 165% per year, and are repaid directly out of wages. So far only about 100,000 workers are being offered these scams by their companies, but at least half a dozen companies are marketing this “service” to employers.
This article goes into much more detail about why these practices are so harmful. However, I know of cases where friends who have above average educations in things financial are so desperate, that they go looking for loans for people with bad credit. I even checked to make sure he understood what a bad idea it was.
It is so very tempting to offer help in such a situation. However, I have also learned how you can get dragged down into situations you avoid by people who do not have the means to avoid them.
When I was a youngster, my parents actually explained to me what this song was all about. I guess I took it seriously.