Payday loans are very useful in times when there is a requirement for instant and emergency cash, but these loans are not without their share of drawbacks. While high interest rates is one con of instant cash loans, harassment from payday loan collections agencies is another trouble, which is faced by most borrowers who fail to repay on the designated date.

Payday loans are to be paid back on the day you get your next salary. Therefore, lenders will almost always ask for a post dated check. In case the check bounces and the borrower is unable to pay, the lender tends to turn to a payday loan collection agency, which aims at pursuing the borrower to make sure that he or she knows the lender wants their money.

It is a widely known fact that payday loan collections companies tend to transcend the boundaries of decency and respect, and representatives are known to stoop to threatening borrowers. This is where you can turn to debt collector laws for help. There are laws that govern these collection agencies. Violations are taken very seriously and dealt with the utmost strictness.

Laws And Regulations Which Protect Borrowers

For borrowers who feel they are being harassed by payday loan collections companies, there are certain laws that offer protection.

• Under the Fair Debt Collection Practices Act, collectors of payday cash loans are not allowed to threaten borrowers with any criminal charges. The reason? These loans are civil debts and cannot be prosecuted under any criminal law enforcement.
• The law says that payday collectors can only make phone contact with borrowers between 8am and 9pm. For any phone call that comes before or after the designated time, you can report the caller. Also, the call cannot be made on holidays and when the loan center is closed.
• In case the borrower is looking to file for bankruptcy and has hired a lawyer and the proceedings have started, the collection agency has to stop trying to make contact with the debtor.
• The law clearly states that the confidentiality of the debtor is to be maintained at all times. The agency’s representatives cannot contact the borrower’s employer, relative or anyone else not involved with the loan.
• As per the Federal Truth in Lending Act, collection agencies cannot ever threaten to attempt to charge any extra or additional fees that go beyond the fees previously outlined in the original loan agreement.

Why You Need To Fight Back

Collection agencies are hired by payday loan lenders to ensure that the loan is paid back. While this is not a bad thing in itself, the way these agencies deal with the borrowers sometimes goes beyond the realm of decency and civility. This needs to be stopped and why you need to fight back if you are ever harassed by any such company.

The best way to deal with a payday loan collections agency is to equip yourself with all the knowledge of the laws that protect you so that no one is ever able to threaten or scare you unnecessarily.

Tags: debt collector laws, payday loan collections, payday loan collections agency
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