Author Topic: Dealing with Payday Loan Companies  (Read 10181 times)

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Flyingifr

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Dealing with Payday Loan Companies
« on: October 14, 2005 11:39:08 PM »
Quote
Originally Posted by mickes on ArtofCredit:
I took out a payday loan in May 2005    defaulted    blah blah the whole common story. The total amount due was $621.57. I made payment arragements via email (still have all emails saved) to make $100.00 payments every pay via western union. Then after making 3 $100.00 payments I get an email from the lady saying they wanted the remaining $321.57 due in full. When I told her I couldn't make the payment she said that they were turning me over to a collection agency and to make no more payments via western union.

Last night I get a call around 10:00pm. Some guy was like I am with a collection agency (didn't say a name) trying to collect an outstanding payday loan from (blah company)    I am calling to get payment arragements.

I told him I wasn't giving out any of my personal information over the phone and he was like well we will be contacting your employer to garnish your wages    have a nice day and hung up.

What do you think? What can they legally do?

Thanks!

I see posts like this very often always saying the same thing    and that boils down to "I have a loan witha payday Loan company that I didn't pay back and now they are making themselves a pain in the butt    calling me a hundred times a day    yelling at me    threatening to garnish my paycheck    take my home    car and birthday and refusing to allow me to work the problem out. What can I do and what can they do?"

The very nature and tone of the question makes me believe that the Payday Loan Company (PLC) has somehow convinced you that (a) they are above the law    (b) you have to accept that status    (c) that you are powerless and (d) they intend to immediately carry out their threats. Sorry to bust the bubble    but none of the above is true.

1. No business is above the law. While FDCPA does not apply to Original Creditors (OC's)    it is important to know when the PLC has "crossed the line" and has placed itself under FDCPA. Once they cross that line    they cannot retreat back. (see FDCPA Section 803(6)) That line is crossed when they try to make themselves appear to be an entity that they are not. A typical example of this would be when Ripoff Payday Loans starts calling and saying they are now Usurious Collections    even though it is still really Ripoff Payday Loans. At that time they "crossed the line" and placed themselves subject to FDCPA. That said    even if they don't cross the line    before they can take anything away from you there is a legal nicety called "suing" that they have to go through. Sorry    but you can't take anything you don't have a specific lien on without a Court Judgment.
2. No consumer has to accept the status that PLC's try to assign to them - powerless and without any recourse. There is plenty you can do to stop a PLC from ruining you    and believe me    they will try. One of the common tricks a PLC will try to do is to attempt to turn your check into an electronic debit    and hit your account early and often. If they get paid    someone else doesn't. If they do it and don't get paid    you get a pile of NSF charges. How do you stop this? The answer depends on when you are going to take the steps to protect yourself. If you act before you take out the loan    just notify your bank in writing (preferable directly to a bank officer) that they are NOT to permit any electronic debits to your account that are not initiated by you. In other words    all electronic debits must have a PIN number of your choosing to validate them. If you take this step after the fact    then (especially if the PLC has tried the debit already) you have the Routing Transit Number and Account Number of the PLC - instruct your banker to refuse ANY debit from that source. If the banker won't do this    close the accoumnt immediately.

3. Now that you see you are not powerless    you need to understand the reality of the situation. You do this by understanding some of the legalities of the transaction. Here is one of the most common collection lies the PLC will use:

Your check bounced    the sheriff is on his way over to arrest you. This lie finds its ounce of truth in the statement that bouncing a check can be a crime. Notice I didn't say "is" - because there are a couple of elements of the crime that must be proven before a District Attorney will take an interest in the case. The first comes to 'criminal intent". The nature of the Payday loan industry is that it anticipates that the borrower will have a certain amount of money in a particular account on a particular day. If your bank statement shows that to be the case    then the prima facie evidence is lack of a criminal intent. If not    then the reason why would be important. Other checks go there first? You cannot control which checks arrive first    particularly with Check21 laws in effect.

Here in Pima County    Arizona    the District attorney has a NSF Check program. There are specific rules for submitting a check to them    and being a Payday Loan company will eliminate them from the program (one of the rejection criteria is "Checks that are predated/postdated or or where an agreement was made to hold the check for a later date"). This eliminates PLC's AND CA's from the DA's program and therefore "the sheriff is on the way" is a lie. Check your county's or city's District Attorney's Bounced Check Reovery program for similar criteria.

Here's Pima County's: http://www.pcao.pima.gov/Docs/Bad%2...uide%202005.pdf

Now that the facts have been reduced to the fact that a PLC is no better than any other creditor and its debt enjoys no particular "privileged status"    you can act accordingly.

4. Now that we have reduced the PLC to just another creditor    I recommend you read "Understanding the Collection Department"    "Understanding the Collection Agency" and "They have an Attorney    Now the Fun Starts" in the Flyingifr Method (link in my sig line). Their refusal to "accept" payments in line with your ability to pay is just positioning. My advice - send them a money order    and see if they cash it or return it. It doesn't make a difference that they told you not to send it - just send it. Sending certified funds back to the debtor over a small debt like a Payday Loan looks awful bad in Court    especially if the payment arrangement you proposed would have paid the debt off before trial date. Nothing looks worse to a Judge than a debtor/defendant appearing in Court    placing enough money orders on the judge's desk to pay the debt in full along with letters from the Plaintiff that they are refusing the payments    and then they sued for the debt. Just watch the expression of anger on the Judge's face when he asks the plaintiff's attorney "why are you wasting the Court's time with this?"

Just remember - playing "hardball" is part of the positioning. In collections    the squeaky wheel gets the grease. PLC's hire the most aggressive collectors they can because an APR of 400% just can't generate enough profits for them.
« Last Edit: December 20, 2005 05:08:07 PM by flyingifr »
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Morality of Debt? No one ever went to the Nether Regions for not paying a debt.

Founder of the Credit Terrorist Training Camp (Debtorboards)

roybean

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Re: Dealing with Payday Loan Companies
« Reply #1 on: March 25, 2006 01:02:24 AM »
What about arbitration agreements that many payday loans try to inforce?
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roybean

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Re: Dealing with Payday Loan Companies
« Reply #2 on: May 23, 2006 08:37:56 PM »
Borrowers keep returning for payday loans
Last year, the industry generated about $6 billion in fee revenue and $40 billion in loan volume at 23,000 stores, according to estimates from the investment firm Stephens Inc. At the six public companies alone, loan volume rose 24 percent to approximately $7.4 billion in 2005 from the previous year.

http://www.msnbc.msn.com/id/12919316/

http://www.consumerlaw.org/initiatives/payday_loans/pay_menu.shtml
« Last Edit: May 23, 2006 08:51:26 PM by roybean »
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poker

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Re: Dealing with Payday Loan Companies
« Reply #3 on: June 20, 2007 08:24:35 PM »
What is the best way to deal with a pay day loan company that makes idle threats?  (suspend driver's liscense, tell employer, have wife arrested etc).

Flyingifr

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Re: Dealing with Payday Loan Companies
« Reply #4 on: June 20, 2007 11:04:57 PM »
If you are dealing with the Payday loan company itself, you do not have FDCPA protections.

If someone else called you on the phone and made those threats, what would you do? Probably just hang up on them. Why should a Payday Loan Company be any different?
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Morality of Debt? No one ever went to the Nether Regions for not paying a debt.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Shiek Yabuty

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Re: Dealing with Payday Loan Companies
« Reply #5 on: June 21, 2007 05:40:55 AM »
My preffered response when they say like that.... Did you know liars go to ?

Really gets a rise out of them payday companies.
What good is money if it can't inspire terror in your fellow man? - Mr. Burns

Flyingifr

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Re: Dealing with Payday Loan Companies
« Reply #6 on: July 31, 2007 11:42:19 PM »
Heres' then new link to the Pima County (AZ) bad check program:

http://www.pcao.pima.gov/badcheck.htm
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Morality of Debt? No one ever went to the Nether Regions for not paying a debt.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Pablo

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Re: Dealing with Payday Loan Companies
« Reply #7 on: July 18, 2008 06:25:46 AM »
Yup no one is above the FDCPA....and remember it says they can't say things that they don't do...so if they don't sue people then they shouldn't be telling people that..however the fact is if you are living above your means you shouldn't be taking money out with these loan sharks anyway...they charge too much interest.  Borrow money wisely & budge your money well.  Go see a financial adviser or a debt adviser if you're having trouble with your finances.
"Another day, another life / To feed with all that I call mine / Is what it takes, so I go out tonight / Shining lights of crossing cars / An open sky, a million stars / They open up my eyes and this is just because / I feel, I feel so alive"  ~ "Feel Alive" - ATB

Flyingifr

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Re: Dealing with Payday Loan Companies
« Reply #8 on: July 18, 2008 05:17:57 PM »
Yup no one is above the FDCPA....and remember it says they can't say things that they don't do...so if they don't sue people then they shouldn't be telling people that..however the fact is if you are living above your means you shouldn't be taking money out with these loan sharks anyway...they charge too much interest.  Borrow money wisely & budge your money well.  Go see a financial adviser or a debt adviser if you're having trouble with your finances.

I am sure your friendly local Collection Agency will be glad to show you how to budget your money. After all, they are good at showing how you should have budgeted it.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Morality of Debt? No one ever went to the Nether Regions for not paying a debt.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Rottweiler

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Re: Dealing with Payday Loan Companies
« Reply #9 on: July 18, 2008 11:20:37 PM »
...the fact is if you are living above your means you shouldn't be taking money out with these loan sharks anyway...they charge too much interest.  Borrow money wisely & budge your money well.  Go see a financial adviser or a debt adviser if you're having trouble with your finances.

OK...if you are not a CA...do you work for a CCCS, or a financial planner, or are independently wealthy--or think that you will beat the odds forever--and are using the "moral" argument as a red herring when what you are talking about is only a failure to complete a contract with a business according to its terms which is an amoral situation (absent proof of fraud or other crime)? 

Or, in this case, being "guilty" of the "crime" of having too much week at the end of the money?:

1.)  First off, for some people "living above their means" means living at all; they make too little money to even pay minimal bills and not be on the street and cannot, for good reason, work a second job, etc..  Others can pay those minimal bills...until something goes wrong as it always will sooner or later? Any such argument based on this viewpoint is nothing but bigotry and class warfare in disguise and can easily come back to bite the proponent later.

2.) The assumption that it's possible for people to always get a loan at reasonable terms almost instantaneously?  If the place is reputable, that simply will NOT happen, even if the credit rating is good.  Financial avisors and/or "debt advisors" (CCCS) are NOT going to stop people from going to the loan sharks:

People who are caught by the payday loan industry (and their close cousins) all too often may well be--or are too scared that they are--that one loan away from eviction or having the power shut off within a day or two...and may not be able to negotiate another solution in time and are acting in fear [even if they should know better].

3.)  Then--since cash flow problems will almost NEVER resolve in only one pay period for all but the famous 1% of payday borrowers (the ones who manage to pay on time)--they are caught in a situation where even going into contract default for non-payment on the payday loan itself is not easy to achieve without the consumer ending up in even worse trouble financially, with their financial institution...or even the creditors they took the loans out to pay in the first place.

4.)  The only real solutions to the payday loan mess and collection abuses by these lenders and their assigns?  It seems that this might not be possible.  The only end in sight MIGHT be to get true NATIONWIDE bans...enforced to the letter... on businesses engaged in "loansharking", including payday loans (state bans--where they exist--are often only bans on unlicensed, usurious lenders of any kind, not payday lenders and their "loanshark" ilk specifically).

In NO case should owing anyone money justify ill treatment by those who want to collect the debt...and payday loan issuers and their CAs almost always honor this only in the breach.
“This is a court of law, young man, not a court of justice."
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Pablo

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Re: Dealing with Payday Loan Companies
« Reply #10 on: July 21, 2008 04:00:34 AM »
Thanks for your viewpoint.  Well to avoid it all would be not to borrow the money from the loan sharks anyway.
"Another day, another life / To feed with all that I call mine / Is what it takes, so I go out tonight / Shining lights of crossing cars / An open sky, a million stars / They open up my eyes and this is just because / I feel, I feel so alive"  ~ "Feel Alive" - ATB

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Re: Dealing with Payday Loan Companies
« Reply #11 on: July 21, 2008 04:13:11 PM »
Thanks for your viewpoint.  Well to avoid it all would be not to borrow the money from the loan sharks anyway.

For many people, it's already too late; such an attitude helps nobody.

(It could also be argued that most sub-prime lenders of any kind could be considered to be "loan sharks", some just charge less interest and may behave slightly better toward their customers than others do.  ;D  )
“This is a court of law, young man, not a court of justice."
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Flyingifr

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Re: Dealing with Payday Loan Companies
« Reply #12 on: July 21, 2008 11:16:08 PM »
Thanks for your viewpoint.  Well to avoid it all would be not to borrow the money from the loan sharks anyway.

Why do people borrow from them? Three reasons:

1. No other avenue for credit
2. Desperation
3. P.T. Barnum was right.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Morality of Debt? No one ever went to the Nether Regions for not paying a debt.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Rottweiler

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Re: Dealing with Payday Loan Companies
« Reply #13 on: July 21, 2008 11:25:16 PM »
Why do people borrow from them? Three reasons:

1. No other avenue for credit

More common a reason than one might suppose, especially since trying to get credit without a good credit rating already in place is getting really hard to do.  If this happens, it does not necessarily reflect on the intelligence of the borrower...especially if this for whatever reason is also operative:

Quote
2. Desperation

Self-explanatory.

Now, if one ever researched into these places, one would discover that the "honeypot" was 'sweetened' with the prettiest 'flypaper' there is!  The ads are virtually guaranteed to prove...

Quote
3. P.T. Barnum was right.

Judging by the sheer extent of the payday loan industry--even where they are NOT supposed to operate (the Internet is not always a good thing)--too many people did not "Go this Way To The Egress" when they should have. 

The results are not pretty.  Profitable for the lenders--like out the behind--but not pretty.
“This is a court of law, young man, not a court of justice."
~ Olver Wendell Holmes

jazbob

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Re: Dealing with Payday Loan Companies
« Reply #14 on: March 17, 2010 06:34:05 AM »
Ok, please allow me to revive a 2 year old thread to throw in my 2 cents worth.   :soapbox:

I once fell victim to the payday loan sharks.  I can't REALLY blame them though, I was the one foolish enough to allow myself to fall into thier grubby little hands.  I found myself facing legal troubles and my only options were to plead guilty or hire a lawyer.  I thought that I had a decent case so I hired an attorney.  Well, the attorney, naturally, required payment up front in an amount that I did not have readily available.  I felt that I had nowhere else to turn except for the payday loan.  Well, long story short, I took out the loan and played thier games.  I even had to call my bank while the payday loan person was on the phone to verify my account balance.  I was forbidden from telling my bank that someone else was on the line or my loan would be declined.  I faxed over check stubs, W-2's and utility bills.  All for a $1000 loan.  Well, I got the loan.  It was deposited in my account the next day.  That made up the difference I needed to pay my lawyer.  Well, payday came around and I could not afford to pay the $1000 back ALL AT ONCE.  That would have been more than half of my paycheck.  I called to see if I could pay it back in installments.  The person actually laughed at me.   >:(  Anyway, they told me that I could do a "loan pickup".  All I needed to do was pay the interest and the loan would extend for another two weeks.  So I did.  $250 was much easier to part with than $1000.  I repeated this process for 6 pay periods before I was finally able to part with the $1000 to pay them back.  So, in a 3 month period, I paid $2500 on a $1000 loan.  The vultures made a pretty good profit off of me.  And BTW, I lost the case too, just to add insult to injury.  Next time a lawyer tells me that I have an "open and shut case" I will think twice. 

Moral of the story = Stay FAR away from payday loans if you can, but sometimes you just have no other choice.

-jaz
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