Shortchanged: Life and Debt in the Fringe Economy

Howard Karger, Author
Howard Karger, Author Berrett-Koehler Publishers $24.95 (252p) ISBN 978-1-57675-336-1
Open Ebook - 273 pages - 978-1-60509-805-0
Paperback - 472 pages - 978-1-4596-2641-6
Open Ebook - 252 pages - 978-1-283-26872-1
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Low-income consumers-and, increasingly, the financially strapped middle class-serve as prey in the predatory economic food chain of what Karger coins the ""fringe economy."" (Buy-here-pay-here outlets, check cashers, payday loan businesses, credit card companies and pawn shops that charge excessive interest rates, high fees, or inflated prices.) Unable to buy outright or qualify for reasonable lending terms, poor consumers fall into exploitative lease-to-own or subprime financing schemes that end up costing them vastly more than the fair market values of the goods and services financed. The lenders, increasingly partnered with mainstream banks, commonly charging triple-digit interest rates and pile on hidden or unnecessary fees. Because of their historically low-rent image, such businesses have long stayed beneath the radar, but the fringe economy's explosive growth and entrance into mainstream America (most notably with pre-paid cell phone plans and the appearance of check cashing services at well-known retailers such as Wal-Mart) have prompted consumer groups to call for reform. With rationality and calm restraint, Karger argues for responsible government regulation and stricter enforcement of usury laws, but concedes the ""marketplace that has lost its moral center"" can't be reformed by regulation alone. An eye-opening read in the school of Barbara Ehrenreich's Nickel & Dimed, Karger's book shines a bright light on the economy's darker side.
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