The report, titled "From Poverty, Opportunity," comes on the heels of a Buffalo News series, "The High Cost of Being Poor," which examined many of the same issues as Brookings researcher Matt Fellowes.

The Brookings study, using national data and information collected from 12 metropolitan areas, concludes that low-income families generally pay more than upper-income families for the same consumer item or service, largely because they rely on alternative providers like check-cashers, pawnshops and rent-to-own stores.

It says the higher costs are caused by a combination of real or imagined risks for businesses, business malfeasance and a lack of knowledge by consumers. But in the end, these families unnecessarily pay hundreds, even thousands, of dollars in extra costs every year.

The report said reducing these extra costs of living for lower-income families by just 1 percent would give them more than $6.5 billion they could use to buy a home, save for retirement or pay for education and health care for their children.

And it called on the public and private sector to educate consumers, encourage reputable businesses to serve communities and crack down on costly businesses that "blossomed in lower income neighborhoods."

"Public and private leaders have a substantial, and widely overlooked, opportunity today to help lower-income families get ahead," the report said.

Low-income advocates praised the report, which looked at New York City, San Francisco, Los Angeles, Washington, D.C., Chicago, Hartford, Seattle, Baltimore, Denver, Indianapolis, Atlanta and Pittsburgh.

"It's a very comprehensive blueprint for some basic legislative changes needed to protect low-income people in this era of unbridled rapaciousness, and many of the needed reforms could be undertaken by state legislatures, including our own," said Peter Dellinger, an attorney at the Empire Justice Center in Rochester.

The News series last month detailed the excessive, and sometimes illegal, fees or interest that low-income people pay to cash checks, obtain banking services, buy appliances or furniture, borrow money for short-term needs and buy homes, cars and insurance. And it revealed inadequate consumer protections.

Similarly, the Brookings study, which has been under way for more than a year, found that:

Check-cashing customers, who typically earn less than $30,000 a year, pay an extra $5 to $50 to cash a $500 check in the 12 cities. Among all 50 states, fees ranged from 1 percent in West Virginia to unlimited in 19 states. The maximum fee in New York is 1.64 percent.

Customers who get short-term "payday" loans against a paycheck can pay as much as 15 percent or more in Colorado, Delaware and South Dakota. The loans are banned here.

Lower-income taxpayers are nearly three times as likely as wealthier families to get tax refund anticipation loans, with interest rates of between 70 percent and 1,800 percent when all fees are counted.

Consumers in a poor neighborhood pay between $50 and $500 more than in a high-income area to buy the same car. And 4.5 million lower-income consumers earning less than $30,000 a year pay an average of 2 percentage points more in interest for a car loan than someone earning $60,000.

4.2 million lower-income homeowners paid 1 percentage point more in interest in 2004 than those earning between $60,000 and $90,000. As many as one in five homeowners with high-cost loans could have qualified for less-expensive credit, while others are victimized by prepayment penalties and unnecessary insurance.

Drivers in lower-income areas of the 12 cities pay up to $1,000 more a year in auto insurance premiums. Homeowners can pay $300 more for insurance.

Poor consumers are more likely to buy furniture and appliances at rent-to-own stores.

Consumers in low-income neighborhoods pay more for groceries because the local stores tend to be fewer, smaller and pricier than elsewhere.

"This is a pretty extensive study. To the low-income folks who pay more, it's no surprise," said David P. Chadwick, an attorney at Legal Services for the Elderly, Disabled or Disadvantaged of Western New York. "For a lot of the naysayers, people who don't believe in the disparity between the pricing, they have to have some form of proof."

Brookings urged policymakers to prod legitimate businesses to reach out to borrowers and neighborhoods, while dispelling myths among consumers to get them into the mainstream. Finally, it recommended developing or adopting tools to help low-income consumers understand their choices. "Ultimately, consumers need to take responsibility to make smart bets on getting ahead, which means knowing which companies to buy from, what goods and services to stay away from, and how to manage day-to-day budget demands," the report said.

John Taylor, president and CEO of the National Community Reinvestment Coalition in Washington, disagreed. "It's not a choice that these people make," he said. "It's a reliance on what's available to them. The poor pay more for everything, and the question is whether that's fair in any system."

e-mail: jepstein@buffnews.com