Payday loan companies are notorious for not following the proper collection procedures. Instead they rely upon threats of arbitration, predatory lending practices, high interest rates, and harassing collection tactics. For example, they often threaten criminal action contrary to state and Federal collection practice laws. Note, there are no debtor prisons in the United States; you cannot be imprisoned for not paying a debt.

If you are being harassed by a payday loan debt collector, 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 ask for an accounting of all charges and payments to date on the account. Demand that they cease and desist from any further collection communications. Finally, if you dispute any portion of their debt (or their interest rates), inform them that you also dispute that debt. You can find sample debt validation/dispute letters on the internet. 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 debt. This includes phone calls, emails, missed calls, letters, etc.

A word of caution, these efforts won’t eliminate any debt obligation (it might even incur further penalties and interest) 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 practice laws. Note, however, payday loan companies rely upon a belief that they have immunity from collection laws due to their status as sovereign nations (i.e. many are owned by tribal nations). It is this belief that empowers them to violate these collection laws. In order to take any action against you, they would essentially need to step off the reservation or hire a locally licensed collection company or law firm to go to Court. It is those persons (i.e. the local debt collectors) who might become liable for the unfair collection practice violations.