📑 ā€˜A way of monetizing poor peopleā€™: How private equity firms make money offering loans to cash-strapped Americans | Washington Post

Annotated ā€˜A way of monetizing poor peopleā€™: How private equity firms make money offering loans to cash-strapped Americans (Washington Post)
Despite the risks, however, Mariner Finance is eager to gain new customers. The company declined to say how many unsolicited checks it mails out, but because only about 1 percent of recipients cash them, the number is probably in the millions. The ā€œloans-by-mailā€ program accounted for 28 percent of Marinerā€™s loans issued in the third quarter of 2017, according to Kroll. Marinerā€™s two largest competitors, by contrast, rarely use the tactic.
Incidentally 1% is the response rate necessary to make spam email and fax financially viable. Coincidence?

Do businesses that rely on a low response rate of 1-2% and succeed have something in common? Could they all be considered predatory?

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Chris Aldrich

I'm a biomedical and electrical engineer with interests in information theory, complexity, evolution, genetics, signal processing, IndieWeb, theoretical mathematics, and big history. I'm also a talent manager-producer-publisher in the entertainment industry with expertise in representation, distribution, finance, production, content delivery, and new media.

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