Poverty is Expensive, Car Insurance Edition

How much more? On average, 59% more, but it can vary wildly. GEICO apparently charged one Minneapolis woman 300% more than a similar woman of “higher socioeconomic status.”

Insurance companies say the disparity is actually due to risk factors like education level and homeownership, not income. Those with less money tend to have less education and lower rates of homeownership, which apparently makes them more likely to get into an accident. But it amounts to the same thing: the less money you have, the more you probably pay for car insurance.

[Star Tribune via MinnPost]

John Oliver Forgives $15 Million of Medical Debt

And does a pretty great job going down the list of what’s wrong with one of the slimiest industries there is.

Google to Ban Ads from Payday Lenders

From the Washington Post:

Google announced Wednesday that it will ban all payday loan ads from its site, bowing to concerns by advocates who say the lending practice exploits the poor and vulnerable by offering them immediate cash that must be paid back under sky-high interest rates.

This is huge. I used to run Google AdSense ads on this site, but stopped because it just felt wrong to be writing about the evils of payday lending while giving them a platform to reach consumers.

Google isn’t erasing payday lenders from the Internet. You will still be able to search for a payday loan. This just means payday lenders won’t be able to feature their ads on unrelated search terms.

Payday lenders are already complaining that this is unfair, of course.

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MN House Speaker Kurt Daudt Gets Sued by Messerli & Kramer

This starts out as a completely ordinary debt collection story. A consumer falls behind on their credit card bills, eventually they get sued by Messerli & Kramer, and Messerli & Kramer gets a default judgment, probably due to Minnesota’s permissive “pocket filing” rule. But in this case, the consumer in question is the Republican Minnesota House Speaker, Kurt Daudt. And it’s a little embarrassing.

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About the US Marshals and Paul Aker’s Student Loan Debt

So this happened:

Seven armed U.S. marshals arrived at [Paul Aker’s] door in Houston last Thursday, arrested him on the spot, and took him to jail. He owed all of $1,500, outstanding since 1987. Aker told Fox 26 that without any warning, his 29-year-old debt was forcibly being collected; the marshals took him to federal court and made him sign a payment plan.

Along with many who saw the story, I was convinced there had to be more to it. Well, there sure is.

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Evictions Used to Attract Crowds. Now they Affect Poor Black Women.

This is an extraordinary quote from an article in the New Yorker:

In February, 1932, the Times published an account of community resistance to the eviction of three families in the Bronx, observing, “Probably because of the cold, the crowd numbered only 1,000.”

Now, evictions rarely attract crowds. According to the same article, “the majority of poor renting families spend more than half their income on housing,” with the predictable result that millions of Americans are evicted every year. Evictions are no longer unusual. They are so common the idea of a crowd showing up for every single one is inconceivable.

This is another profound quote from that article:

If incarceration had come to define the lives of men from impoverished black neighborhoods, eviction was shaping the lives of women. Poor black men were locked up. Poor black women were locked out.

The consequences overlap. Both convictions and evictions land on records, and both make it harder to get a job, credit, rent an apartment, and ultimately get out of poverty.

I don’t mean to suggest that it is wrong to evict people who aren’t paying their rent. What’s wrong is that so many Americans can’t pay rent, and that so many of the Americans who can’t pay rent are black. Those are complicated problems. Criminal justice reform is finally getting some attention, but we really need to work on both issues.

Why Was the Link Obscured in This PayPal Class Action Notice?

That image comes from an email sent out to consumers affected by a PayPal class action settlement. For some reason, the default color and underlining were removed from the link to submit a claim.

It didn’t happen by accident. It’s obvious from the code that someone deliberately set the link’s color to black (color:#000000) and the text-decoration to none (text-decoration:none), which removes the underlining.

But it probably wasn’t an attempt to deceive. The settlement administrator, Epic Systems, Inc., was just following the email template precisely. Here is the email template included in the settlement agreement:

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Filing Bankruptcy, Avoiding a Scam

Guest post by Paul Kuzmickas.

The latest bankruptcy scam targets bankruptcy filers and those with significant debt. In the last few weeks, bankruptcy filers have been receiving phone calls from con artists disguised as bankruptcy attorneys, using software to look like a law firm on caller ID. These con artists are asking for immediate payment of outstanding debts and threatening to arrest those who do not comply.

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Personal Finance Cheat Sheet on an Index Card

All you need to know about personal finance is right there, according to Harold Pollack. Now, Pollack is not an investment manager or financial planner; he’s a professor of social sciences at the University of Chicago. But his index card (that’s it, above) was so popular he wrote a book, The Index Card: Why Personal Finance Doesn’t Have to Be Complicated, with Helaine Olen.

In an interview on Minnesota Public Radio, Pollack identified the most important thing on the index card:

The most important of the index card guidelines is the one many Americans do not follow: “Pay your credit card balance in full every month.”

“Credit card debt is so deadly,” Pollack said.

Like the rest of the advice on the index card, that’s solid advice everyone should follow. [Minnesota Public Radio]

Edit: If you like short-form financial advice, the New York Times asked eight financial writers to squeeze their best tips onto index cards, too.

The Frugal Stars Playing for the Washington Redskins

Just because you make millions, that doesn’t mean you should blow it all on cars. Or at least, that seems to be the lesson of some of the young stars on the Washington Redskins.

Two-time pro bowl running back Alfred Morris, who makes a base salary of $1.5 million this year, has taken to riding a bike to work and leaving it in his reserved parking space. On days when it’s too cold or otherwise inconvenient to cycle to the facility, Morris switches to a splashier ride: a 1991 Mazda 626, which he drove up from Florida as a rookie in 2012.

That’s smart, especially in a sport where it probably makes sense to get out before your brain turns into a sponge. [Wall Street Journal]