Immigrant Justice - Introduction

Having made the often-difficult journey to the United States in search of opportunity, America’s newest residents all too often find themselves easy prey to the consumer abuses that thrive in the low-income communities in which many of them live. They must learn to access telephone and utility services, to protect themselves from landlord exploitation, to buy and insure a car, to avoid unscrupulous high-rate lenders, and to negotiate successfully all the other consumer choices which daily impact their lives. These marketplace decisions have as big an impact on their economic health as does the size of their paychecks.

Credit and banking issues, in particular, negatively effect immigrants making consumer choices as they adjust to American life, enter the work force, seek education, and open bank accounts. A wave of deregulatory fervor in the last two decades, has removed many of the mechanisms that once curbed marketplace abuses. Check cashers, finance companies, rent-to-own, and other sub-prime lenders, now virtually unregulated, prey upon low-income and immigrant communities.

Although there is a common misperception that low-income people do not need credit, and certainly cannot afford it, the reality is that credit is so pervasive in the American economy that it effects even the most basic of everyday needs. For example, the absence of credit or ‘bad’ credit can be the reason someone is denied admission to rental housing, deterred from opening a bank account, or prevented from buying a car for transportation to work.

With no other resources available to them, vulnerable, unsophisticated immigrants turn to the largely unregulated, exploitative fringe market and quickly become trapped in escalating cycles of debt that their incomes cannot meet.

Even cashing that precious, hard-earned paycheck and paying bills can be problematic for the country’s newcomers.

	Marketplace Justice for New Immigrants
	Marketplace Abuses Victimize Low-Income Immigrants Having made the often-difficult journey to the United States in search of opportunity, America’s newest residents all too often find themselves easy prey to the consumer abuses that thrive in the low-income communities in which many of them live. They must learn to access telephone and utility services, to protect themselves from landlord exploitation, to buy and insure a car, to avoid unscrupulous high-rate lenders, and to negotiate successfully all the other consumer choices which daily impact their lives. These marketplace decisions have as big an impact on their economic health as does the size of their paychecks. Credit and banking issues, in particular, negatively effect immigrants making consumer choices as they adjust to American life, enter the work force, seek education, and open bank accounts. A wave of deregulatory fervor in the last two decades, has removed many of the mechanisms that once curbed marketplace abuses. Check cashers, finance companies, rent-to-own, and other sub-prime lenders, now virtually unregulated, prey upon low-income and immigrant communities. Although there is a common misperception that low-income people do not need credit, and certainly cannot afford it, the reality is that credit is so pervasive in the American economy that it effects even the most basic of everyday needs. For example, the absence of credit or ‘bad’ credit can be the reason someone is denied admission to rental housing, deterred from opening a bank account, or prevented from buying a car for transportation to work. With no other resources available to them, vulnerable, unsophisticated immigrants turn to the largely unregulated, exploitative fringe market and quickly become trapped in escalating cycles of debt that their incomes cannot meet. Even cashing that precious, hard-earned paycheck and paying bills can be problematic for the country’s newcomers. For example: An immigrant who cashes fifty $320 payroll checks can pay from $160 to $960 (average of $374.50) to the check casher per year - money better spent on clothing, food, or housing; Those without bank accounts must often pay bills with money orders. The purchase of just 48 money orders a year (four per month) will cost an average of $288; and Payday loans (where cash is loaned in exchange for a postdated check) typically cost from 150% to 250% of the check’s face value - but without access to a mainstream bank the poor consumer sometimes has no other choice. ( See Pay Day Loans ) Additional consumer abuses stem from and play upon immigrant fears about the fragility of their legal status. Non-attorney notarios take advantage of an individual’s desperation, inability to speak or read English, and unfamiliarity with the legal system. Some notarios falsely claim that they can expedite naturalization; many specialize in housing, bankruptcy, and other credit concerns that could result in victims losing their homes and/or forfeiting bankruptcy rights. The consequence of these scams and the failure of many notarios to provide even minimally competent legal advice are devastating for immigrants trying to build productive lives in a new country. Legitimate community resources and service providers, lacking consumer awareness or expertise, provide little, if any, help to those with consumer problems. (See: Immigration Consultant Fraud ) Unfortunately, limited fluency in English and unfamiliarity with the American marketplace make immigrants particularly vulnerable to consumer abuses. Also troubling is the fact that they suffer disproportionately when they fall victim to marketplace abuses because they are less likely to seek help for legal problems than are other low-income consumers. Cultural and psychological barriers explain part of this hesitancy: many immigrants are distrustful of the legal system, for example, having come from countries with arbitrary and prejudicial systems of justice. Transition into the American marketplace requires many transactions that put these new, often inexperienced consumers at risk of abuse, just when they most need the benefits of the American economic system. Only when marketplace barriers are removed will immigrants ul be fully integrated into American society, enjoying the productive lives they have given so much to achieve - likewise will America be enriched by the diversity and productivity of its foreign-born residents.

An immigrant who cashes fifty $320 payroll checks can pay from $160 to $960 (average of $374.50) to the check casher per year - money better spent on clothing, food, or housing; Those without bank accounts must often pay bills with money orders. The purchase of just 48 money orders a year (four per month) will cost an average of $288; and
Payday loans (where cash is loaned in exchange for a postdated check) typically cost from 150% to 250% of the check’s face value - but without access to a mainstream bank the poor consumer sometimes has no other choice. ( See Pay Day Loans )

Additional consumer abuses stem from and play upon immigrant fears about the fragility of their legal status. Non-attorney notarios take advantage of an individual’s desperation, inability to speak or read English, and unfamiliarity with the legal system. Some notarios falsely claim that they can expedite naturalization; many specialize in housing, bankruptcy, and other credit concerns that could result in victims losing their homes and/or forfeiting bankruptcy rights. The consequence of these scams and the failure of many notarios to provide even minimally competent legal advice are devastating for immigrants trying to build productive lives in a new country. Legitimate community resources and service providers, lacking consumer awareness or expertise, provide little, if any, help to those with consumer problems. (See: Immigration Consultant Fraud )

Unfortunately, limited fluency in English and unfamiliarity with the American marketplace make immigrants particularly vulnerable to consumer abuses. Also troubling is the fact that they suffer disproportionately when they fall victim to marketplace abuses because they are less likely to seek help for legal problems than are other low-income consumers. Cultural and psychological barriers explain part of this hesitancy: many immigrants are distrustful of the legal system, for example, having come from countries with arbitrary and prejudicial systems of justice.

Transition into the American marketplace requires many transactions that put these new, often inexperienced consumers at risk of abuse, just when they most need the benefits of the American economic system. Only when marketplace barriers are removed will immigrants ul be fully integrated into American society, enjoying the productive lives they have given so much to achieve - likewise will America be enriched by the diversity and productivity of its foreign-born residents.

Marketplace Justice for New Immigrants