Shortchanged takes an uncompromising look at the corporate vultures that prey on America?s working class. Made up of pawnshops, payday lenders, check cashers, credit card companies and the like, the fringe economy entices vulnerable consumers into an economic netherworld of high interest rates and ever-increasing debt. The book examines the factors behind the fringe economy?s rise ? stagnant wages, rising numbers of working poor, and the 12 million U.S. households without bank accounts ? and investigates the sleazy practices ? instant credit, cash-for-your-title loans, predatory mortgage lending, E-Z home equity loans ? that result in phenomenal growth for the industry and a nightmare for the consumer. Powerful analysis is combined with moving personal stories of the mothers, fathers, and families whose lives have been put on the line for the perpetuation of this economy. Ruthless, compelling, outrageous, and often enraging, Shortchanged puts the spotlight on the shady side of America?s economic underbelly.

"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. " Publishers Weekly (Starred Review) (Copyright Reed Business Information, Inc.)

As James Baldwin once noted, "Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor." That observation is perhaps truer than ever in today's United States, with its proliferation of predatory businesses that take advantage of the economic insecurity of the poor. Karger (social policy, U. of Houston) profiles this fringe economy and details the impact it has on its victims. He presents chapters describing predatory practices of the credit card industry, storefront loan operations, the rent-to- own industry, pre-pay telecommunications, fringe housing, real estate speculation, the fringe auto industry, and the "getting-out-of-debt" industry. He concludes with proposals for reform.
Annotation ©2005 Book News, Inc., Portland, OR (booknews.com)

This narrative takes an uncompromising look at the corporate vultures that prey on America's working class. Made up of pawnshops, payday lenders, check cashers, credit card companies and the like, the fringe economy entices vulnerable consumers into an economic netherworld.