Search the web and you will not find a definition for the term "Vulture Marketing." It's shocking as there is such a great use for that term. I've long felt that organizations that take advantage of the less fortunate were vultures. They specifically target people that are vulnerable to products/services that take advantage of their vulnerabilities. The people these vultures target will never be able to improve their lives as long as they keep falling victim to these vultures. Their vulnerabilities can include, poverty, mental illness, addiction, language limitations, and more.
There is a very solid argument to be made that there is a negative correlation between vulture marketing and the economy (I'll explain this below.) Without naming specific companies, I'm going to provide some examples of vulture marketers below:
Payday Loans & Cash Advance:
These places prey on people that are either poor, uneducated, newcomers, and/or out of options. They usually charge a 20% interest rate for a payday loan. 20% interest for a 14 day loan? That's absolutely ridiculous. It's obviously taking advantage of people that are very desperate or that don't understand how high of an interest rate they're paying. It's no coincidence that the majority of payday loans locations are in areas with a high rate of poverty. Casinos also charge similar outrageous interest rates when offering cash advances of credit cards. I've even seen casinos that offer payday advances. Would an individual that is in a good state of mind and without a gambling addiction gamble their future paycheck knowing the odds were against them and that there was a 20% interest rate? No.
Guaranteed Approval Used Car Loans:
I once briefly worked for a car dealership that guaranteed approvals on used car loans. The cars were 20-30% overpriced and the interest rates were anywhere between 20-30% per year. I was shocked as the dealership sold more of these type of deals than new cars and commercial vehicles combined. The people who went for these bad deals were often new immigrants with no credit history or people with horrible credit. The dealerships know that customers have very little leverage because they have no other options for obtaining a vehicle. Due to this, they overprice the car and offer interest rates over 20%.
Cash For Gold:
Pawning items is one of the oldest forms of commerce and I love the show Pawn Stars. Although pawn shops indirectly target vulnerable people, I wouldn't classify it as vulture marketing. Places that primarily offer "quick cash for gold and jewelry" would be classified as vulture marketers. A lot of people that own gold or silver don't know the true worth of their jewelry and don't realize that they are being offered well below scrap value for their jewelry. If the price of gold is $60/gram, "the cash for gold" places will offer you anywhere from 10-40% of its scrap value. You will always get substantially more by selling it privately on Kijiji or letgo.
There are multiple other types of vulture marketing tactics that victimize people that are vulnerable. Some tow truck drivers often scam and take advantage of people who are in a stressful situation. This video by CBC Marketplace is very informative on this issue. Some moving companies scam and take advantage of people and hold their positions for ransom on the day of a move because they know that people's options are limited on a moving day. How do they find these vulnerable people? They typically do this by offering very low prices to target people who can't afford professional movers. Again, this video by CBC Marketplace is very informative on this scam. High interest rate credit cards, 2nd & 3rd mortgage lenders, Multi-level companies, the list of vulture marketing tactics are limitless.
To be clear, there are a lot of professional and reputable moving companies, tow truck drivers, 3rd mortgage lenders, etc. The term vulture marketing should be only be used if the organization is targeting people who are vulnerable.
What are the impacts of vulture marketing on the economy?
My hypothesis is that vulture marketing is negatively affecting our economy.We can confidently assume that the people that are more likely to fall victim to vulture marketing are people that are below the poverty line. If these people continuously fall victim to vulture marketing tactics and continue to pay outrageous interest rates, they will never be able to grow financially and get out of poverty. That can't be good for the economy. It would be a stretch to link vulture marketing to suicide rates and addiction rates without research, so I won't go there.
I typically won't write articles that are controversial, but I felt that this issue gets nowhere near the level of attention it deserves. I'd love to hear everyone's thoughts on vulture marketing. Please share your thoughts!