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The Poverty Business Impoverishes Us All – Byline Times

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Iwan Doherty investigates how businesses profit from poverty and billions are invested to increase indebtedness.

Over the past 10 years, poverty in this country has dramatically increased. Even those in work are not safe from being just one missed payment away from losing their home or unable to turn the heating on. Four million people in work in the UK now live in poverty, foodbank usage has rocketed and rough sleeping has increased significantly since 2010.

The combination of the financial crash and Tory austerity has left an underclass of people perpetually trapped in poverty. While this group is villainised, the truth is that most people are never more than three misfortunes away from joining them.

40% of working age Britons have less than £100 in savings, 25% have none at all. This means that 16 million of us are living pay cheque to pay cheque, at risk of dropping into a world of food scarcity or homelessness.

Poverty has come to be accepted as a by-product of our economic system and, shockingly, companies now exist to counter the effects of the social safety net.


Preying on the Poor

Industries such as banking, housing and utilities effectively prey on the poorest in society, trapping them in desperate situations.

It has always been cheaper to consume goods and easier to gain money when a person has money, but now predatory businesses stalk those who have slipped into unfortunate circumstances, with the intent of ringing them for every penny they have while they strive to stay afloat.

Where we see poverty and vulnerability, corporations see profit. Companies now don’t just exploit the poor; they rely on it and it is central to their business model.

This can be seen most starkly in the financial industry. Private debt is a growing problem in the UK, with unsecured debt recently hitting a new peak of £15,400 per household. Unsecured debt is debt that is not a mortgage and it has now risen to £428 billion – well above the £286 billion peak in 2008, ahead of the financial crisis. This continued rise shows that Brits continue to live beyond their means in a worsening economy for those on the lowest incomes.

This desperation fuels predatory business that is best exemplified by the banks’ penalties for lacking money in the form of overdrafts and payday lending.

More than two million people in the UK are stuck permanently in their overdrafts, trapped in a vicious cycle. In 2017, banks made more than £2.4 billion from overdrafts and around 26 million of us get charged for using overdrafts a year. This is a dramatic rise from £1.2 billion in 2016.

Banks have recently been hiking their overdraft fees to in excess of 40% but, in comparison to payday loans – or high cost credit – overdrafts are cuddly. Payday loans are the last resort for those whose credit is not good enough to gain an overdraft. They are usually short-term but still come at huge costs with APR rates exceeding 1000%. In a one-year period in 2017-2018, these companies made 5.4 million loans, equating to a total of £700 million in interest alone. This industry is vast but its main consumers are below 30 and earning less than £1,500 a month.

Prior to the financial crisis in 2009, around 250,000 people yearly took out a short-term loan. By 2012, these firms lent over £2.2 billion in loans to 1.8 million people. New regulations on these companies may have pushed this business elsewhere but new rules on overdrafts could push people back to pay day loans to cover their expenditures.

Studies observe that payday lenders congregate in neighbourhoods with higher rates of poverty, lower education and minority populations and the average lender is using these loan companies six times a year. The predatory nature of this market cannot be under-emphasised. They rely on consumers with bad credit and while these loans can be in demand, they exist purely due to banking practices.

Countless industries have systems where consumers are penalised for their poverty. Overdrafts, payday loans, pre-credit utilities are all systems of penalising the poorest in the society.


Gambling

Companies aren’t just targeting individuals. A more recent development is the large private companies in the housing sector that exist to make money out of the housing crisis and our cash-strapped councils.

Councils using private housing company providers as temporary accommodation has cost them more than £215 million in the last financial year. Firms charged on average £10,000 per booking and a third of these bookings breached guidelines on costs for temporary accommodation. These companies can only exist due to our homelessness crisis and the Government’s lack of action on housing is costing people while lining the pockets of the super-rich.

So-called ‘luxury’ industries also form a part of the problem. The gambling industry is an example of one that preys on those in poverty through different but equally sinister methods.

Gambling has always been predatory but it is now hyper-advertised, with people becoming addicted to it for a variety of reasons. 7% of gamblers say that they gamble to “earn money to get by day to day”. Recently, the large betting companies have been exposed as relying on impoverishing a tiny number of addicted gamblers to survive. One betting firm took 83% of all deposits from 2% of its customers.

Worse still, the owners are playing both sides, with Betfred’s owners making millions from a company treating those addicted to gambling. The gambling industry is growing fast, being worth £8.4 billion in 2011 to roughly 14.4 billion in 2018. Both big gambling firms and the lottery rely on vulnerable people to make their money and its rate of growth may explain the increasingly organised efforts to tackle gambling. It’s no coincidence that betting shops tend to be found on the same streets as pay day lenders.


Universal Credit

It’s not possible to delve into how people become trapped in poverty without considering the Conservative Government’s flagship Universal Credit policy.

Universal Credit – a single monthly benefits payment which replaces six other benefits for those who are unemployed or a low income – is leaving millions worse off and the punitive sanctions applied to the policy means that our poorest citizens are ending up indebted to the welfare state that should be aiding them. This makes them easier prey to poverty businesses.

Food bank use has increased by 52% in areas where its roll-out has been completed. The Trussell Trust, a charity that runs food banks in the UK, has found that 40% of foodbank users reported having some form of deduction or debt to the Department for Work and Pensions. Two-thirds of households referred to foodbanks have experienced problems with the benefits system in the past 12 months.

With a new Conservative majority Government, Universal Credit is unlikely to be changed anytime soon as we have a new Government. Although there are solutions such as credit unions and charities offering debt advice, we can expect millions more to be driven to debt and food banks over the next five years.


The Human Cost

The human cost of the growing poverty business is a major issue in our society as millions struggle with poor mental health brought on by the stress of debt.

As long ago as 2014, the Debt Support Trust identified that one in seven of us struggled with sleep because of debt and that 50% of people struggling with debt have considered suicide.

The evidence shows that it is time to start a campaign to divest from shares in companies that build their business and profits on the backs of the poor because there is little hope of government regulation in this area, even though there is a glaring need for it.


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Miracles in a tough season

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Harry Hines Boulevard in northwest Dallas is a “track,” a place where prostitution is, at least in normal times, visible and available. It’s a wide, treeless expanse of concrete, low-slung buildings, and neon signs. On a Saturday in early August, a nearly full moon glowed in the southeastern sky. A couple of strip clubs had reopened and, judging from the parking lots, were doing good business. Outside of one, a doorman stood wearing a surgical mask. 

The pandemic hurt strip clubs like those on Harry Hines Boulevard, and it also put a crimp on prostitution generally. The Dallas Police Department (DPD) reported that cases of johns “purchasing prostitution” dropped 63 percent during the first half of 2020 compared with the same period in 2019. Human trafficking reports dropped by 39 percent. “COVID has definitely had an impact,” said Maj. John Madison of DPD’s vice unit.

But the pandemic effect has not been all good. Harmony Grillo, founder of Treasures, a California-based ministry to sex trafficking victims, said traffickers are forcing some women to do more porn webcamming “to meet the increased demand that’s created by those in quarantine.” Carol Wiley, director of A Way Out, a similar program in Tennessee, said fewer johns may be renting women face to face, but she fears that “violence toward the women [by traffickers] increases.” 

Some of the heaviest and least-anticipated impacts of the pandemic have fallen on victims of sex trafficking who had already escaped the life. One such victim—call her Ava, because she has legitimate fear of her trafficker tracking her down—was recovering from three years of being sex trafficked when the pandemic hit.

Ava, 24, escaped her trafficker in 2018. She built a relationship with God and overcame deep-rooted social anxieties. But the pandemic shutdown took away much of the community she had built since escaping prostitution. In-person worship services at her church in Fort Worth stopped. Small groups she attended on issues from emotional support to financial coaching could no longer meet.

Ava was living in a house run by Valiant Hearts, a Texas-based group that helps women escape the sex industry. As the pandemic lockdown continued, house parent Tiffany Kiser noticed that Ava had lost the optimism she’d gained since being in the program. She stayed in her room and refused to talk about what was bothering her. 

In normal times, Valiant Hearts provides women with choices, something victims lose when they are trafficked: To appear controlling risks having a victim equate you with her trafficker. But Ava was at a critical point in her healing, one that called for an unorthodox approach. Kiser and Emily Chavez, Valiant Hearts’ program director, demanded that Ava sit down with them. When she did, her hands shook and her face looked as if a year and a half of therapy had completely unwound. Ava said she couldn’t explain how she felt or why. “Just start talking,” Chavez said.

SEX TRAFFICKING IS A LARGE, sophisticated, underground economy, with its own networks, business models, and jargon. Criminals like the one who trafficked Ava are the successful entrepreneurs of the industry. They own multiple homes and drive expensive cars. At any one time, they may control dozens of prostitutes, sometimes trading them with affiliated traffickers in other parts of the country. They diversify across every segment of the market, from prostitution conducted along streets to discreet, “agency-­level” procurement deals for wealthy and prominent johns who shield themselves behind third parties. 

Ava’s trafficker controlled 30 women of different ethnicities, shapes, and hairstyles. He used a combination of charm, coercion, and physical assault to keep them in line. One night after a birthday party for one of the women, police responded to a call about an attempted robbery and shooting. When the police saw so many women and only one man in the house, the officers became suspicious—but could find no grounds to arrest anyone.

The next day, one of the women told Ava she wasn’t feeling well and needed to go to the hospital. Ava loaned her a cell phone so she could call for a ride home. Ava never saw the phone again. At the hospital, the woman told authorities her real problem: She was being trafficked and needed help. The phone became evidence in the case against the trafficker. 

Six months later, police raided the house where Ava lived, arresting her, the other women, and the trafficker. Since she was recovering from invasive cosmetic surgery, police placed her in a segregated cell as a protection against infection. There she remained for six weeks: “It was the first time that my brain had freedom to think the way it wanted to.”

“It was the first time that my brain had freedom to think the way it wanted to.”

In jail, Ava began asking God to show her if He was real. He opened her eyes to see her situation: The trafficker claimed to care about her while beating her and crushing her sense of self-worth. One day as she lay on the skimpy jail mattress, a letter arrived from a friend. It contained a Bible verse, Jeremiah 29:11—“For I know the plans I have for you, says the Lord. Plans to prosper you and to harm you.”

Ava wasn’t sure what to make of it. Were there plans to harm her? She looked the verse up, and realized her friend had miscopied it. The actual verse reads “… not to harm you.” In that moment, she realized if she stayed with her trafficker she might share with her trafficker some of the affluent, glamorous life he portrayed to the world, but there would be harm. 

She decided to take her life away from her trafficker and give it to God.

When she met with her lawyer, she pleaded to find a place where she could learn how “to be human.” That’s how she ended up at Valiant Hearts. Ava was baptized a year ago. Photos from after the service show Ava’s face stuck in a smile that, as she described it, almost covered her eyes.

Ava’s battle was not over. She had to sort through years of emotional damage. For three months after moving into the Valiant Hearts house, she was afraid to leave, only going to church or with others to the grocery store. She also had to unravel a financial and legal mess. Sex traffickers bind and exploit victims by using their identities to open businesses and bank accounts for laundering money. Ava learned about a house in California deeded in her name.

“It’s very strategically planned out,” Chavez said, “so that nothing ties back to [the trafficker]. And when the ladies come out … they have debt, tax evasion, criminal histories, bad credit, and bad relationships with banks.” Ava’s credit score was “about as low as it could get.” Banks turned her down five times for a checking account before she got one through a connection to someone who owned a bank.

WHEN THE PANDEMIC HIT and Ava withdrew, Chavez was worried. She demanded that Ava “just start talking.” 

It started with tears, and what Ava later described as “word vomiting.” She began to see how in the absence of healthy routines and regular worship, she had fallen into old patterns of thought dictated by her trafficker: She’d never amount to anything, never be anything but a prostitute. Ava began to realize the extent to which the pandemic had become a trigger, but one she could counter with skills she had already learned in counseling. 

Since then Ava has made progress. She’s completed the Valiant Hearts program. With her legal troubles mostly behind her, she is moving into her own apartment. She has a job with Savhera, a company that provides employment to victims of sexual exploitation. She is also starting college and has a 10-year plan to get a Ph.D. in clinical psychology, so she can “help more survivors like myself get deeper healing and understanding.”

“This will be the first time I’ve lived on my own literally my entire life. Woo-hooo! The Lord has shown off in this season, really showing miracles. But it’s also been a really tough season.”  

—Paul McDonnold is a graduate of the World Journalism Institute mid-career course



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Warner Robins GA Credit Repair Finance Score Improvement Service Launched

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New credit repair services have been launched by the expert team at Fresh Start Consumer Services. They work with clients in Warner Robins, GA and the surrounding areas.

New credit repair services have been launched by the expert team at Fresh Start Consumer Services. They work with clients in Warner Robins, GA and the surrounding areas.

Fresh Start Consumer Services has launched a new credit repair service for clients looking to improve their financial future. Interested parties can sign up for credit consultations, in-depth credit analysis, credit recommendations and more.

Full details can be found at: https://freshstartconsumerservices.com/index.html

The newly launched services are designed to ensure clients can repair bad financial credit history, track their improvement campaign in measurable ways, and secure a better future for themselves and their family.

Clients can work with Fresh Start Consumer Services to clean up their past. This is achieved by working with the major credit bureaus and creditors to challenge the negative report items that affect the credit score.

Based in Warner Robins, GA, the expert team at Fresh Start Consumer Services is passionate about helping citizens to improve their credit score to give them more buying power. As a result of this, clients are able to secure more options in life.

The team understands that sometimes bad things happen to good people, and their services are designed to ensure that clients can get the most out of life. They also realize that a bad credit score can harm clients’ quality of life – and can be a difficult situation to get out of.

Fresh Start Consumer Services offer courses in credit repair and restoration, budget management, credit education and purchase assistance. Clients get easy access to their account 24/7 for live status updates on improvements, allowing them to fine-tune the management of their credit score.

Service options include personalized dispute options to fit each clients’ exact credit repair needs, an experienced case analyst and case advisor working personally with them throughout the process, custom dispute letters, and more.

For clients, there are a number of reasons to work with a credit repair specialist. Clients are able to secure significant savings on interest rates, attain better terms on loan products, and get access to the best credit card deals. They also gain access to more housing options.

The team states: “Fresh Start Consumer Services offers a unique combination of services that gives our clients the quality of life they deserve. We specialize in helping our clients achieve qualifying credit and the financial health they desire.”

Full details can be found on the URL above.

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Is it Possible to Trade In a Car Early?

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Yes, early trade-ins are possible when you finance a vehicle. In fact, there’s no set time frame on trading in a car. Most dealers won’t take a trade-in that’s too fresh, though, and it’s best to wait until there’s equity in your vehicle before you try to trade it in.

What’s a Trade-In?

When you trade in a car, you’re essentially selling it to a dealership and financing something else from their lot, without the hassle of selling and buying with separate transactions. There are no hard-and-fast rules about how and where you have to trade in your vehicle.

However, it’s beneficial to shop around and see which dealers can give you the best price, but you shouldn’t just head to a car lot and ask what they’re willing to offer you. When the time comes, there are several steps you may want to take to get ready for the trade-in process, especially if you’re looking to trade in early before you’ve had the chance to close the equity gap.

Trading In Early and Equity

Are Early Trade-Ins Possible When You Finance a Car?When you’re trading in a vehicle soon after you’ve financed it, you’re more likely to be in a negative equity position – owing more on your auto loan than the car is worth.

This is especially true if you financed a new vehicle, or a certified pre-owned car. Newer vehicles depreciate faster than used ones, which have typically already seen their biggest drop in value.

Depreciation is the loss of value over time and it can’t be stopped. It can be slowed, though. The best way to do this is by using a large down payment when you finance. This reduces the amount you have to borrow, and leaves you owing a price closer to what the car might cost after you drive it off the lot. New vehicles typically lose around 10% of their value as soon as they touch the road.

If you don’t have the equity to recoup your investment in a car, you have to make up that difference out of your own pocket. It’s much easier to trade in a vehicle that can pay for itself, but this isn’t always possible when you’re trying to do so early.

Preparing Your Early Trade-In

When you know that you’re starting with a deficit on your trade-in, it’s a good idea to be prepared to get the most you can. Clean the car thoroughly, both inside and out, and make sure to fix any minor damage that may have occurred in the short time since you took out your loan.

Getting the vehicle detailed and fixing major mechanical issues isn’t likely to result in a worthwhile increase to the cash in your pocket, so don’t go overboard. Remember, you want to make as much money on this trade as you can, and it’s probably cheaper for the dealership to fix any large issues.

Before you set foot in a dealer to get your trade-in appraised, it’s a good idea to know approximately how much your car is worth. You can find this out by going to online valuation sites such as Kelley Blue Book or NADAguides. Be sure to be honest when you’re inputting information, since it’s the only way to get an accurate estimate of possible value.

Shopping for Trade-In Values

Once you have the estimates (which you should print or save to your phone), it’s time to take your trade-in to get looked at. Taking it to a few different dealerships is a good way to find the best deal you can.

We recommend taking your early trade-in to at least three different dealers, making sure at least one of them is a franchised dealership that sells your vehicle’s brand. A franchised dealer that sells your car’s brand may be more likely to offer a higher price.

Depending on your credit situation, it’s likely a good idea to ensure you’re trying to trade in your vehicle to a dealership that can work with your situation, especially if you have poor credit. And that’s where Auto Credit Express can come in handy.

We have a nationwide network of special finance dealers that are signed up with subprime lenders who can help people in many different types of credit situations, including bad credit, no credit, and even bankruptcy.

The process is easy to get started – just fill out our free auto loan request form. We’ll match you to a local dealership that can get you started on the financing you need after your early trade-in.

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