Asked 3 months ago - New York, NY
FlagI was forced to take a Payday loan to bridge a gap. They actually deposited more than I asked for. The interest is incredibly high with an APR of several hundred percent. Is this legal for them to do?
Please note, I am licensed only in Pennsylvania. The following is not legal advice but rather my personal and practical thoughts on how to battle payday loan companies. Pay Day Loan companies are notorious for not following the proper procedures, but they rarely file a lawsuit. Instead they rely upon arbitration provisions, predatory interest rates, and harassing tactics. For example, they often threaten criminal action contrary to state and Federal Collection practices. Note, there are no debtor prisons in the United States.
You should begin the process of protecting yourself by sending a certified mailing to the payday loan company asking for validation of that debt which includes a request for a copy of any contract. The letter should also request an accounting of all charges and payments to date on the account. Also demand that they cease and desist from any collection communications. Finally, if you dispute any portion of their debt, inform them that you dispute that debt. You can find sample debt validation/dispute letters on the internet. You should keep a journal and record any and all communications efforts that come after receipt of that letter as they might be in violation of the law; which could be used to argue that they have waived their right to collect the deb.
A word of caution, these efforts won’t eliminate any obligation (it might even incur further penalties) but, in theory, it should stop the debt collector from harassing you and will serve as a basis of possibly identifying future violations in collection laws. Note, however, payday loan companies rely upon a belief that they have immunity from collection laws due to their status as Indian nations.
You can also try the state attorney general’s office for guidance as well as the Federal Trade Commission.
Stew Crawford, Jr., Esq.
Crawford Law Firm
A Full Service Law Firm Serving Pennsylvania & New Jersey
223 North Monroe Street
Media, PA 19063 (Philadelphia Area)
1-877-992-6311
www.crawfordlaw.org
E-Mail: payday@subrolaw.us
Payday loans are illegal in New York. Furthermore, charging interest in excess of 25% per year constitutes criminal usury which means that in addition to the lender facing charges you are not required to pay the interest or the principal back. Contact you local district attorneys offices and file a complaint.
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