Strike Debt Combats Payday Loans
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UPDATED: Dec 4, 2012
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Strike Debt has clear plans to tackle the payday lending industry along with other lenders by using donations to purchase owed money. Rolling Jubilee, a project from Strike Debt, has so far raised $431,867, which has abolished $8,642,157.
Using donations, Rolling Jubilee purchases debt that is in default for pennies on the dollar. This common practice is used by debt collection agencies whereby they purchase defaulting debt on the secondary market and then pursue the borrowers for the owed amount.
The secondary market refers to the practice of lenders selling the rights to defaulted debt to collectors in order to cut their losses. This is done when it becomes clear that borrowers will not repay lenders. Debt collectors willingly buy this debt because they feel they can use their pressuring abilities in order to get borrowers to repay them instead.
Hoping to prevent debt collectors from purchasing outstanding loans, Rolling Jubilee instead purchases defaulted loans—including payday loans—and abolishes them. In effect, this liberates debtors from all the money owed. This includes outstanding fees and any possible money they would have been charged at the hands of debt collectors.
Strike Debt has expanded from simply operating on the secondary market to also informing borrowers of ways in which they can remove their own debt.
The organization has posted a free online ebook called “The Debt Resistors Operations Manual.” Aside from discussing mortgages, student loans, and even municipal debt, the ebook also discusses payday loans. Through the eyes of its Strike Debt authors, the ebook describes payday loans as the worst possible form of debt. It also talks about how to properly default on these types of financing.
In addition to offering advice on how to effectively fraudulently apply for a payday loan, the ebook also has a somewhat fantastical plan for the destruction of the payday industry.
Literally named “How to Destroy the Payday Loan Industry,” the plan aims to coordinate a thousand people into moving between the US, Canada, England and Australia after borrowing several cash advances. These travelling borrowers will then shuffle their funds around various bank accounts and then use this money in other countries in order to “fight the system.” According to the plan, eventually the thousand-strong army of conspirators will be able to “take out” gargantuan lenders like Wonga, the UK’s premier payday lender.