You imply “dishonesty”, ie, deception, in not applying any of the roll over fee to the principal.
This deception would have to be blatant in the lending documents, as in stating “some portion of the fee will be applied to principal”. I’d bet you anything it says exactly the opposite, or else there’d be a lot of lawsuits going on.
Are the lenders being “dishonest” when the customers refuse to read the agreement?
It is dishonest. Because they like to push people to borrow to the max (their whole pay check, or whatever their state allows), but to pay it back you need to pay the entire loan amount plus the loan fee, which for their target customer is enough to generally make them have no money until the next pay day, but hey there’s this nice offer they have, just pay the fee and it gets rolled over. They specifically push people away from smaller more easily repaid loans, that’s a dishonest predatory practice, and it’s usury, and blocking usury is a legit function of government.