Evidently this is a fully legal 'scam'. Here's the deal - seniors, how often live on fixed income from social security checks, are being targeted as a lucrative and reliable market for these Payday Loan companies. These companies make small, short-term loans to people to give them quick access to cash so they don't have to wait for their paycheck (or social security check!) to clear the bank. These companies make money by charging interest...for example 15% interest for one week. These deals can add up to an effective annual interest rate of 400%! SOmehow these guys are able to charge these usary rates in spite of regulations out there to prevent such things.
For seniors it's doubly difficult b/c once they get into this trap, they can't get out. Unlike younger people, it's not as if they can work more hours to make extra money to pay off the interest on these loans. So the Payday companies make the interest, each month the seniors fall further behind, and the Payday loans don't have to worry about getting paid since these are Social Security checks - completely guarenteed.
The Wall Street Journal hired a geographer to do a study of where these Payday Loan companies locate themselves; many are clustered around government subsidized housing for seniors and the disabled.
If you know of a senior using these services - help them get off of them! They are a financial death-spiral for someone on fixed income.
For more info - check out the Wall Street Journal on 2/12/08