Fritzand Helga work for a local manufacturing company. Since their marriage five years ago, they have been working extensive overtime, including Sundays and holidays. Fritz and Helga have established a lifestyle based on their overtime earnings. Recently, the company lost two major contracts, and all overtime has been eliminated. As a result, Fritz and Helga are having difficulty paying their bills. Several months ago they began using a local payday loan company so that they could pay their bills on time. The first week they borrowed only a small amount to cover some past due bills. The next week, however, to pay back the loan plus interest, they were left with an even smaller amount to pay bills resulting in a higher payday loan the second week. In paying back the second week's loan, their remaining available funds were further reduced. This cycle continued until they were no longer able to borrow because the repayment plus interest would have exceeded their paychecks. Now Fritz and Helga's cars have been repossessed, their home has been foreclosed on, and they are preparing to file for bankruptcy.

1. Was the payday loan company being ethical in continuing to lend more and more to Fritz and Helga each week?
2. What could Fritz and Helga have done to avoid ultimate financial ruin?