Payday Loans

Beware Of Payday Loan Collection Scam

With the growing number of illegal payday lenders, especially in the online market, the incidents of payday loan collection scam have substantially increased in the last few years. In this scam, consumers receive debt collection calls for those payday loans that they either never borrowed or have already paid back in full. Obviously, such things are illegal, but the unfortunate thing is that it is happening, and it is happening in a good volume. Therefore, it is very important for you to know how to get yourself protected against such scams. Following is a brief rundown on it.

Debt Collection Laws For Payday Loans

Because of the growing debate on the predatory nature of payday loans, most states now have enacted specific laws to regulate this unconventional form of lending. You have been provided certain legal rights when it comes to protecting yourself against payday loan collection scam. Unless you are aware of the laws applicable in your state, you will never be able to use those rights in your favor. So, the first thing you have to do is to educate yourself on how the laws apply in different debt collection cases.

Statute Of Limitations

Many consumers do nothing against those harassing collection calls, where the debt collectors ask them to make payment toward a very old debt. Consumers think they still owe those debts and so they do not take any legal action against the callers. But, it is very important for you to keep in mind that if the payday loans are very several years old, the chances are that the statute of limitations applicable to those debts has already expired. The exact statute of limitations varies significantly from one state to another and it is calculated from the date when you had made the last payment toward your debts. When this statute of limitations expires, you can no longer be held legally liable to repay those debts. Such attempts from lenders are treated as payday loan collection scam, which you can file compliant against. You can contact the federal trade commission or your state authority to file your complaints.

Debts That You Have Already Paid

You are also strongly recommended to keep proper records of the repayments that you have already made. There are many unscrupulous payday loan companies in the market that often try to collect debts that you no longer owe. As part of their illegal practices, they try to withdraw fund from your bank account directly. Such things are very much likely in situations, where you authorize your lender to debit the sum of money directly from your bank account on the set due date. If you are struggling with a payday loan collection scam, where your lender is trying to debit a higher sum of money than expected, the first step is to contact your bank and block that lender from the direct authorization list. If that does not work, you can even consider closing that bank account. In either case, you must file a written complaint with the state authority or with the federal trade commission.

Sending The Same Check Again And Again For Collection

Another very common practice that payday lenders are often involved into is that they send the same check again and again for collection. It usually happens when the check bounces because of non-sufficient fund in your bank account. Every time the check bounces, you are charged a hefty amount of money as NSF (non-sufficient fund) fee by both your bank as well as your lender. By sending the same check again and again for collections, lenders actually get an excuse to charge this NSF fee multiple times that eventually causes the outstanding balance on your debt to grow very fast. Luckily, the laws are in your favor, which restricts the lenders to send a check for collection just once and that the NSF fee must not exceed $30. But, here again, there can be certain exceptions depending upon the state you are living.

Last, but not the least, when it comes to dealing with payday loan collection scam, you must also note that the payday loan laws of your state apply to Internet based lenders also irrespective of which part of the world their offices are located at.

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