All she needed was $300. Now, Southside resident Emma Gaile is praying for a miracle.
Following a divorce, Gaile decided to leave her Southeast Georgia home in October of last year and move to Jacksonville to start her life over.
As any newcomer can attest, there are expenses -- first and last month's rent, telephone and electricity hookups, motor vehicle registration fees and other odds and ends -- associated with planting roots in a new town.
Finding herself in a bit of a pinch, she went to a car title loan business on the advice of a friend and took a loan for about $300, putting the title to her brown-beige, 1986 Honda Accord LX as collateral.
Two months and a lawyer later, she's still trying to get her car -- her sole means of transportation -- back.
It was experiences such as Gaile's that compelled the Jacksonville City Council in January to cut the interest rates that title loan shops could charge from an annual rate of 264 percent to 18 percent -- a level that drove most shops within Duval County out of business.
Consumer advocates who counsel people in circumstances similar to Gaile's warn of other easy credit businesses -- among them pawn shops, rent-to-own retailers and advance payday loans -- that they say profit from people's troubles.
But those who work in the named industries say they are providing a service to a segment of society that has little alternative or choice -- particularly with small loans -- because mainstream lending institutions don't typically dole out $300 or $500 loans.
"Our consumers are not dumb," said Michael Coniglio, an attorney and president of the Southern Association of Title Lenders, an organization with members in 15 states.
"Everyone likes to portray our clients as if they're poor and dumb and we need to protect them from themselves," he continued, saying that 90 percent of title loan borrowers pay back their loans in full.
Gaile was one who fell behind on her title loan. After it had been repossessed when she missed a payment, she spent July 26 and the next six days trying to get her car back.
Under Florida laws, title loan companies can legally take possession of automobiles if the borrower doesn't meet his or her end of the contract.
Though Gaile acknowledged that her payment that week was late, she said she explained to the title loan lender earlier that same week that she would make her payment -- roughly $280 -- on July 27.
"I want people to understand what they're getting into," Gaile said, explaining why she opted to share her story when others in similar circumstances might want to keep it private.
"They think it's quick and hassle-free, but there's nothing quick and hassle free about it. I don't care how much money you need," she said. "If they're going to cut your lights off, it's better to let your lights be cut off; you're going to run into a lot more problems than having the lights turned off."
Rent-to-own companies, which have been around for about 30 years, offer the convenience of making small weekly or monthly payments for rented furniture or electronics with an option to return the merchandise when no longer wanted or needed. After a fixed number of payments, however, the rented merchandise becomes the property of the person renting it.
The rub, advocates say, is that the consumer will pay charges the equivalent of 200 percent to 300 percent interest over the term of the rental contract.
Moreover, advocates and traditional retailers say that even if the consumer ends up keeping the item -- which is often used to begin with -- that customer has often paid more than what he would have paid had he purchased it with cash or used a credit card charging 16 to 24 percent interest.
Payday loans are just that -- loans given to people who are between paychecks but need money right away. …