How Magic Johnson Uses His Name To Exploit Low-Income Consumers
That’s a worthy goal. But consumer advocates who specialize in monitoring businesses that exploit America’s working poor are not always pleased with Johnson and the ways he’s made his money. And while the social merit of ventures to bring fast food into urban areas — Magic Johnson Enterprises has had interests in Burger King franchises — can certainly be questioned, they’re more concerned by his deals with the financial services industry. They say that Magic has endorsed products and companies that profit by hooking consumers into ill-advised credit agreements.
Among Johnson’s business endeavors and endorsement deals:
3. A 2009 commercial for Jackson Hewitt’s refund anticipation loans.
Loans so controversial and high-interest that the Military Lending Act banned service members from receiving them. “If you need cash quickly, Jackson Hewitt has the Money Now loan. It’s fast, it’s simple — it’s money like magic,” he said in the commercial, describing the loans whose annualized interest rates ran as high as nearly 500%. Hewitt and other tax preparers have since stopped offering the loans as a result of regulatory changes.