A Las Vegas Loan Center Blog

I spoke briefly on the usefulness of blogs.
Now I want to give you some examples of simple ways to promote your business.

Social bookmarking:
Sites such as Digg can generate huge amounts of traffic.
Rich over at the “My view of the World” blog just did this short piece on the Digg effect.

Continuing articles:
This site is being promoted through Digg, but instead of a single article he presents the information as if it were chapters in a book.
Ending this article with “Over the next few weeks, I will discuss the enjoyable, disappointing, and desirable aspects of…. ”
Followed by a “subscribe now link”, using feedburner, which is an rss aggregator.

From the Wikipedia:
RSS is a family of Web feed formats used to publish frequently updated content such as blog entries.
RSS aggregators give readers a choice, in a single location, as to what feeds they want to watch.
The use of RSS enables your readers to keep up on any additions to your blog.

News letters;
Email newsletters are effectively free, until you have a large enough mailing list to required the upgrade of your service.
Send them out weekly or monthly. Keep them short, informative and entertaining.
How often you send the newsletters is not as critical as the regularity with which you send them.
The reason I mention entertaining is that those newsletters are less likely to get deleted that the usual boring “just the facts” newsletters.
You may have to get someone to write copy for you if you lack the time or talent.

Company website:
As more and more people use the internet to find products and services a company website becomes increasingly critical.
Unless you are in to retail in a big way, the object of the company site is not to sell product, but to sell the company.
Most people click on the first site they see and go from there. If your site doesn’t grab their attention or is to confusing or worse yet, difficult to navigate, your potential customer will quite simply hit the back button and go to the next site.

Domain names:
Find a domain name that is easy to remember and relatively short.
Buy your own name, do not let someone else control it for you. If someone else owns the domain name they can do pretty much anything they want with it, including selling it.

We have several domains, the primary names being pioneerloan.com, loansbypioneer.com and pioneerpawn.com.

When buying domain names we goofed, another pawnshop in Reno has pioneerloan.net. Because of the similarity in names, every once in a while people get our sites confused.

The Internet is the world’s tallest soapbox. You have a potential audience of multiple millions.
All you have to do is get and keep their attention before the guy on the soapbox next to you steals your ever so fickle readers.

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LendingTree has notified its customers that former employees helped unauthorized mortgage lenders hack into its systems and steal customer information from 2006 to 2008. These lenders then used the passwords to access LendingTree customer information files, normally available only to LendingTree-approved lenders, to market loans to LendingTree’s customers.
The files contained loan request data such as name, address, email address, telephone number, Social Security number, income and employment. Credit card information (such as account number or account balance) was not involved.
Concerned clients can call LendingTree at 866-505-8874 to speak with one of the customer service representatives who are available from 9am to 9pm ET seven days a week.

More than 160 data breaches were reported during the first quarter of 2008, more than double the amount the year before, according to the nonprofit Identity Theft Resource Center. Of those, 7 percent were in the banking, credit and financial industries. The overall increase could be due in part to more mandatory reporting laws, the center noted.

If you watch the news this problem extends to the largest organizations.
Watch who has Carte Blanch access to your databases. Structure your software so that getting more than one person’s data at a time is difficult. And be aware whether or not you need to report data lose and if so to whom and in what time frame.

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Someone mentioned the other day that they had read in some business related magazine that blogs were dead.
The person who wrote that either did not communicate all the facts behind this statement or lives in a cave.

In a computer literate world such a statement has no basis in fact. If blogs are dead, I would question why every major publisher in every major industry maintains at least one, usually several blogs.

Having said this I would point to this blog as an example of something that is under used and under developed.

This sort of blog needs to be maintained with a great deal of regularity. Being about a specific industry or in this case a pair of related industries, it needs to be informative and timely.

When they proposed changes in the law, I should have started shouting from the rooftops monthes before it happened.
Unfortunately I was uninformed on the subject and those who would change the rules were organized and efficient in their maneuvering.

Unlike the pawn industry, those in the payday / title loan industry lack organization and are at the mercy of the movers and shakers in Carson City.
I have been told by those who know such things that at least two companies in the payday loan industry helped write the laws pertaining to the title-loan industry.
I believe the time honored phrase is “divide and conquer.”

My point is that with a well maintained blog you get return visits to you website.
The additional benefit of blogging is, if you can develop a following, and things start to go wrong you have a voice.

If you start a blog on Blogger it costs you nothing more than a bit of time.
If you have a domain, host it there, simply make it a sub-domain.
I recommend Wordpress, because of it’s simplicity and multitude of plugins.
I also recommend Google Analytics to keep track of your visitors.
Do not expect miracles.
Traffic will be slow to build.
Just remember that 10 unique hits a day represents 300 people a month that you have reached.

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On March 27, 2007 the Attorney General of the State of Iowa issued this statement:

I’m elated that the Legislature passed an excellent bill and that Governor Culver is signing it today. This is a very important measure for consumers, and it was one of my highest priorities this year. And this is a crucial start on our overall goal of tackling predatory lending in Iowa on several fronts.

Car-title loans have astronomical and unjustified interest rates, typically 264% and sometimes 360%. On top of that, the consumer puts his or her car at risk – the car-title loan company takes a lien on the car and actually takes keys to the car to make repossession easier.

But Car-title loans are about the only kind of loans where the lender gets to have it both ways: the loans have astronomically high interest rates, and they are secured by the consumer’s car or truck. Consumers get a bad deal on both counts, while the loan company gets a great deal. It’s unfair, it’s unjust – and now it’s a thing of the past in Iowa.

I heartily applaud the Legislature and Gov. Culver for prohibiting such abusive and unconscionable rates for car-title loans.
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Miller also noted that car-title loan companies charge very high interest, but they do not run a credit check in order to determine if a consumer is able to afford such a costly loan – because the loan is secured by a vehicle. “The one indicator of predatory lending that everybody agrees on is making a loan without regard to ability to pay,” he said.

“Indeed, with the first payment due just 15 days after the loan, it is very unlikely that the consumer who needed $300 15 days ago will have $344.55 just 15 days later to pay off the loan,” Miller said.
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The State of Nevada is considerably different than Iowa, in that once the car is repossessed, the company is not allowed to make a profit. They are allowed to charge some additional fees to cover the cost of repossession, but any moneys beyond that must be forwarded to the consumer.

As a matter of company policy we run a credit check on our clients.

Our contracts are 30 days with an optional renewal up to six times. Making the potential term of the loan a total of 7 months, no required payments to the principle.

Until the legislature changed the rules, yet again, we were allowed to do installment loans on titles with terms of up to 14 months with payments consisting of both interest and principle. Allowing the consumer to be paid in full at the end of the contract.

Now with the rule change the consumer runs an even bigger risk of forcing the title Loan company to repossess the vehicle.

It’s my personal opinion that when politicians try to save people from themselves the invariably do more damage than good.

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First and foremost:
Pawnshops are forbidden to sell or rent their client list.

Second:
No information can be given out about customers or what they have pawned without a request from LVMPD Pawn detail.

Third:
No item may be released to anyone other than the party who pawned it. Including wives, fathers, sisters, and so on.
The exception to this is if the original person who pawned the item gives us a notarized letter giving permission to release their item to a third party.

Forth:
In the case of a death, proof must be presented both as to the death and to the legitimacy of the claim.

Fifth:
If something was stolen from you, you must file a police report. We cannot help you without the intervention of Pawn Detail.

Sixth:
If you cannot or will not pay what is due by the end of the loan your item becomes our property.
This is the entire premise behind pawning. — You leave us your property as security, we give you cash. You pay us back what is owed, including interest, we return your property.

Seventh:
We are not here to “rip you off.” We are bound by strict regulatory and reporting rules.

Eighth:
Aside from the problems that arise from breaking the rules, to put it succinctly; We do not want your property — We want your money.
We want your return business. — The more often you return to pawn the same item with us, the more money we make.

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Dell currently has 3 15″ laptops under $700 and I got an email offering a notebook from them for $599.
Dell desktops with a 19″ Widescreen Flat Panel Monitor start at $519 this does not take into consideration the email only offers.
At Circuit City they have Sony notebooks starting at $779.99
At Walmart they have notebooks starting at $398
And so on.

This is why we rarely loan more than one or two hundred dollars on a computer and we only take brands we are familiar with.

The other day I read a review about a 17″ Acer laptop with a blue-ray dvd for $899.
The reviewer’s comment was that a few months ago the blue-ray would have cost almost that much.

Anyone who has watched the price of electronic knows that there’s always someone in China willing to make a cheap knock-off. Now the mainstream manufacturers are having to drop prices just to maintain market share.

Never loan more than you can recoup, including interest.

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My take on gold:

The current problem with gold is that everybody is selling and nobody is buying.

When I looked on Kitco this morning gold was down to $928, after being just over $1000.
We started the year with gold at or near $850 and some “experts” were predicting $1200. With the Fed unable to properly bolster what’s left of the economy this is a possibility. However, when the market is overwhelmed by the number of sellers the price cannot sustain it’s continued rise. Even in Turkey where gold is a form of not only adornment but financial security, the demand for gold is reportedly down 20%.

The real problem is that the price of gold jewelry is beyond the reach of many consumers. And those that do buy are forced to buy less, or buy jewelry 10k instead of 14 or 18k.
We recently melted quite a bit of gold and took a small profit rather than have it sit in the vault. This decision was primarily do to a drop in retail jewelry sales.

Regardless of what those in DC say, we are in a recession, with unemployment rising, and discretionary funds falling.

I read an article that said gold was effectively recession proof. After wading through the skewed logic I wondered what would happen if the dollar fell and gold rose dramatically. Now we know. If you bought gold at just over a thousand you’ve taken a bad hit and the only choices you have are to cut your losses or hope the “going to $1200″ experts were right.
It doesn’t sound very recession proof to me.

Having said all this and having absolutely no expertise in the field; I predict gold will be down to at or near $800 in the next 60 days.

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I ran across this article on Mississippi pawnshops in the New York Times, it was published back in 1997, but as far as I know the same rules still apply.

One factor in the huge growth in pawnshops is Mississippi’s relatively loose regulations. When Hayes Bolton lived in Texas, an application for a pawnbroker’s license was required to show proof of having $150,000 in unencumbered liquid assets. But in 1993, when Mr. Bolton opened his Lighthouse Pawn Shop across the street from Biloxi’s historic white lighthouse, he had only to produce a $10,000 bond and pay licensing fees of $150 to the state and $250 to the city.

Perhaps more important is the lucrative return that Mississippi allows pawnbrokers. The pawnshop interest rate of 25 percent per month is equivalent to an annual percentage rate of 300 percent. On a $1,000 loan, for example, interest at the end of a year would be $3,000. As a practical matter, however, most loans last only 60 days; after that, the pawnbroker is entitled to take possession of the pawned article. By comparison, in Las Vegas, the monthly interest rate is 10 percent and loans last 120 days.

The title loan businesses, which usually lend up to one-third of a vehicle’s value, also charge 25 percent interest a month.
”The title bond business is so good you can’t do without it,” Mr. Bolton said. ”It’s so good, it’s like dope.”

Don Schwartz, the owner of Gulf Coast Jewelry and Pawn, operated buy-and-sell shops in Atlantic City for five years and then moved to Nevada, where he decided against opening a pawnshop in Las Vegas because the license was too expensive and the business was dominated by a few large companies. Instead he opened a pawnshop on the gulf coast.

What’s left of the Mississippi Gulf is pretty much saturated, but there are other places opening casinos. If any of these have the same liberal rules they might be worth a second look if you are thinking about opening a pawnshop.

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The FTC accused Goal Financial of violating the agency’s Safeguards Rule by failing to adequately assess the risks to consumers’ personal information, adequately restrict access to this information to authorized employees, implement a comprehensive information security program, provide adequate employee training, and, in some instances, contractually require third-party service providers to protect the information.
The company failed to protect personal information such as birth dates, Social Security numbers, and income and employment information, the FTC said in its complaint against Goal Financial.

This is the 17th case the FTC has brought against companies for allegedly lax data security practices.
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The price for sloppy security just got higher.
The rumor mill says that the FTC is going to follow the lead of the IRS and target smaller companies just to keep everyone honest.

The IRS loses money on the average small time audit, but they do them to scare the little people into paying their taxes.
The FTC will go after the first small company they can just to scare the rest of us into keeping customer data secure.

This is not however the reason you need to keep your customer data secure.
The first provable loss of such data will make the local papers and the 6 o’clock news. While they say that any publicity is good publicity, I would doubt very much that any of us can afford to lose very many current, or future customers.

It’s not just bad publicity we need to worry about. –What do you think the competition would pay for your customer’s name, address, phone number, ssn, dob, amount of loan, interest rate and payment history?
All of this information is readily available to most loan officers. Whether they pull it from the database one customer at a time or copy the entire database doesn’t matter. The damage will be done.

You need to be aware that most hacking is not some pimple faced kid sitting around smoking and drinking gallons of coffee while trying to guess passwords. –Most hacking is a matter of social engineering.
Most data theft is an inside job. Spies are spies, whether employed by countries or the competition down the street.

The primary reasons people become spies are not monetary, it’s ego. They feel that nobody listens to their brilliant ideas, that they could run the company a thousand times better, that they were passed over for a raise or promotion because someone else was brown nosing.
They mostly do things because of a real or imagined wrong, the money or promise of a better job is just the clincher.

People will share user names and passwords and when things go wrong they will swear it wasn’t them and they would never give anyone else their password. Somebody must have stolen it…. “Really, they did. I swear I never gave it out. You know I don’t lie.”

As long as every employee has access to all customer data, or password security is not enforced, you will have a leak. —It’s not a matter of if, but when.

Keep your data backed up in case of a server crash or in case somebody damages the database, whether on purpose or by accident.

And lastly Do Not Let Anyone Install Programs They Brought from Home.

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We got the garbage issue straightened out… More or less.
—-They make up the rules as they go along, we try to follow said rules.

We had some major drama around here.
–It should never have happened, or at the very least it should have remained personal. However, as long as we are forced to hire people instead of computers, this sort of thing will happen and it will inevitably directly effect the business.

A few words that never should have been spoken resulted in a lot of hard feelings, and one employee quitting.
—Not to mention an inordinate amount of gossip, rumors, lies, and innuendo.

We are now looking for someone to train as a loan officer. In the mean time the schedule had to be rearranged. –So far there hasn’t been a great deal of complaining.

This is one of the basic problems of running a small business, you simply cannot afford to keep any extra staff on payroll. Therefore whenever someone quits you find yourself scrambling to replace them.

It has been our experience that finding people who are willing to work for what we are willing to pay, who are capable of doing the job, and are willing to show up and actually work is difficult.

The young ones don’t seem to understand the basic concept of work and the older ones are either established in their field and not interested in changing jobs, or are incapable of working without supervision.

Some things are certain in this business:
Regardless of personnel problems, we will continue to function, our customers will continue to be taken care of, and sooner or later more drama will occur.

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