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Can a payday loan company send charges for fraud and conspiracy to commit fraud for defaulting on their loan in Michigan?

East China, MI |

I received a phone call from a collection agency for a pay day loan company telling me that they were sending charges for fraud and I would be prosecuted if I didnt arrange a payment that day. Can they do this? I think it is only a civil matter and not a criminal matter, is this correct?

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Attorney answers 3


Payday lenders make this threat all the time, but I have yet to see any law enforcement prosecute on it. Public prosecutors are not debt collectors and they have plenty to do going after people who have actually committed crimes. In Nevada, it is a crime to pass a check when you know it is no good, but a payday lender knew the check wasn't good when they accepted, so they forfeited their right to complain to law enforcement.

Your state government regulates payday lenders and you may wish to complain to your government about this untrue and unethical collection practice. Hope this perspective helps!

Gary D. Bollinger

Gary D. Bollinger


Attorney Bunce wrote, "Payday lenders make this threat all the time, but I have yet to see any law enforcement prosecute on it." In Eastern District of MO, where I practice, in have seen more than one prosecution.


No. Michigan law specifically prohibits criminal fraud charges arising out of the failure to pay a pay day loan. This kind of sleazy tactic by the collection agency violates both state and federal debt collection practices statutes. Under these collection practice laws, you are entitled to recover money damages against the collection agency and, in some cases, even punitive damages, plus your costs and attorney fees.

My advice is do not hesitate to contact an attorney immediately. If you would like to consult with me (no charge), feel free to contact me at: (248) 540-9270 or by direct e-mail: It would be my pleasure to help you put a stop to this kind of abuse.


I would give Attorney Liblang a call. She is correct. These collection practices happen all the time and are not right. You are correct. It is a civil matter and the collection agency has no authority to prosecute you as they say. In fact, it is quite possible they they could be prosecuted for extortion. Give Attorney Liblang a call. Good Luck!

The comments listed here do not create an attorney-client relationship. The comments are for informational purposes only and are not to be considered legal advice. This attorney is only licensed in Michigan and does not give legal advice in any other state. All comments are to be considered conversational information and you should not rely on these comments as legal advice or in place of retaining an attorney of our own. The comments here are based solely on what you have provided and therefore are general in nature and with more specific facts or details a different answer or outcome could result. The legal system is not a perfect science and this attorney does not guarantee any outcome.

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