Dealing With Illegal Payday Lenders
When it comes to dealing with illegal payday lenders, there are plenty of things that you need to take into your http://iga.edu/best-custom-essay-writers/ careful consideration. First of all, you must be well aware of the payday loan laws applicable in your state. It is very important for you to keep in mind that there are sixteen states that have either completely banned or prohibited extremely high-rate lending; those states include Georgia, New York, New Jersey, Arkansas, Ohio, New Hampshire, Maine, Arizona, Connecticut, Massachusetts, Oregon, Maryland, North Carolina, Vermont, Pennsylvania, and West Virginia. If you are residing in any of these states and any lender has still issued you a payday loan, this is an illegal activity on part of the lender. Even other states where payday lending is still legal, there are certain restrictions regarding the basic loan terms. You need to be well aware of those restrictions in order to do a thorough review of your existing loan contracts to find out if there have been any violation of laws. Many times, the lender (include Internet companies) is not even duly licensed to run such businesses in your state.
Following is a brief rundown on how to deal with such lenders.
Know Your Legal Rights And Find Out What You Are Responsible To Pay Back
There are certain legal rights that the US and your state laws have provided to you when it comes to dealing with illegal payday lenders. It is also very important to note that just because the lender that issued the cash advances to you is running their business illegally, it does not mean that you do not have any repayment obligation to them. Since you have borrowed money from them, you are responsible to repay at least the principal amount (without any interest or finance charges). If you have borrowed multiple payday loans, you just have to add the principal amount from each loan together to find out how much in aggregate total you have to repay.
Contact The Office Of The State Attorney General
If you do not have much idea about what kind of payday loan laws are applicable in this state, you can contact the office of your state’s Attorney general and request them to provide you a detailed list of those laws. This way, you will be able to explore your options on how you can deal with illegal payday lenders in your state. You can also check the past records of your lenders and find out if they are licensed or not. Many times, lenders’ license expires but they continue to be in business. However, if you are living in a state where payday lending is not legal, there is obviously no question of licensing at all.
Close Your Bank Account
When you sign a payday loan contract, you agree to authorize your lenders to access your bank account to withdraw cash from it on the set due date. If not, you at least give them postdated checks, which they can send for collections when the due date arrives. As soon as you find out that the lender you have borrowed the money from is an illegal one, the first thing you have to do is to close your bank account. This will help you avoid the hefty check bouncing charges if you do not have sufficient amount of cash in your bank account to clear the check. Besides that, the check you have given is probably for an amount including interest and other charges. But, as per the laws, you are only obligated to pay the principal amount, not any interest or other finance charges. Therefore, even if you have sufficient amount of cash in your bank account, you are still advised to close your account while you are dealing with illegal payday lenders. Alternatively, you can at least request your bank to prevent specific lenders from getting access to your account or block the checks that you have given to those lenders. You can convince the bank to do this by showing them the documents proving that those lenders are actually illegal ones and that you are just trying to save yourself from them.
Talk To Your Lenders
Once you safeguard your bank accounts, you can now contact the lenders. You can give them a call, write them an email, or visit them personally if they have any physical office in your area (which is very unlikely). Let them know that since they are running their business illegally, you have blocked the checks or closed your bank account so that they cannot access the same and that now you are willing to pay only the principal amount that you have borrowed from them because this is what you are obligated to repay as per the laws.
Though it is quite okay to talk to those illegal payday lenders about the repayment, but at the same time, you are also advised to file a complaint against with them with the BBB (Better Business Bureau), with the FTC (Federal Trade Commission), and with the state authority that is authorized to regulate payday lending in your state.