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 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 can not be imprisoned for not paying a debt.
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 collection communications. Finally, if you dispute any portion of their debt (or their interest rates), inform them that you 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.
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 New Jersey & Pennsylvania
223 North Monroe Street
Media, Pennsylvania 19063 (Philadelphia Area)
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Payday loans are not legal in New York so if they sue to collect you should win.
I am a former federal and State prosecutor and now handle criminal defense and personal injury/civil rights cases. Feel free to check out my web site and contact me at (212) 577-9797 or via email at Eric@RothsteinLawNY.com. I was named to the Super Lawyers list as one of the top attorneys in New York for 2012. No more than 5 percent of the lawyers in the state are selected by Super Lawyers. The above answer is for informational purposes only and not meant as legal advice.
Report the loans to the State Attorney General. while PDL loans are illegal in NY these loans are being made by Indian owned companies from Indian reservation lands. They are arguing that they are exempt from state law as they are a sovereign nation under federal law. The issue has not been decided yet and is still winding its way throgh the court system but NYS is putting pressure on these companies and trying to force a settlement. With the help of the attorney general you may be able to cancel the debt or reduce it to the original principal amount borrowed.
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