October 21, 2013

Pay Day Loans, Types and Legalities

Pay Day Loans
I do not support or endorse these types of loans. I just want to let people know what I have
found out over time in dealing with them myself and on the behalf of others.  I am not an attorney. I am not offering legal advice. The information and ideas I share are my opinion only.
There are 2 types of Pay Day Loans, Store Front and Internet. Then each of those have several different options such as Installment or Lien. If you get one and make the wrong decisions, you could end up loosing your car! The laws and rules governing them vary widely from state to state so if you have one or get one, please go to your states website and look under Financial regulations to see if they are legal and what laws pertain to them and you. Military members and their families have a different set of regulations so they need to get in touch with their supervisor or the Family Help Center on their base or in their area.

In Maine, all internet Pay Day Loans are ILLEGAL. Store Front lenders are LEGAL as long as they are registered with the State Regulators.

PDL's are ILLEGAL in the following states...

Store Front: These are places with an actual store in an actual building. You should check on your State website to make sure they are legal. READ, READ, READ all the writing before you sign anything!

Internet: These DO NOT have a physical store. They are what you see online with all the promises of fast cash. Again, check your states web site to make sure they are legal before you even apply. Sometimes they are legal but sometimes they are not. They are subject to your states laws no matter where they originate. These loans are, in my opinion, dangerous. You could end up paying over $1000 for a $300 loan!

If you default on a store front loan, you will be subject to their collection practices. They have to follow the law for collections and again, you should visit your states website for information.

Defaulting on an internet loan is a whole different game! You may think you only have to pay the principal back plus a small interest, but think again! Sometimes they charge up to 600% interest! Most states have laws pertaining to how much a lender can charge you for interest. If you default you might want to consider changing your phone number. The collectors for these types of loans are known to break the law in collection activities, threaten people and even call their places of employment. First, make sure the collector calling you is licensed to collect debts in your state. If they are, they must follow the Fair Debt Collection Act. If they are not, you dont have to talk to them. Call your states Regulations Department and ask them to help you with the lender and to see if any laws were broken in the lending.

The Fair Debt Collection Practices Act requires that debt collectors treat you fairly by prohibiting certain methods of debt collection.
What debts are covered?
Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.
Who is a debt collector?
A debt collector is any person, other than the creditor, who regularly collects debts owed to others. Under a 1986 amendment to the Fair Debt Collection Practices Act, this includes attorneys who collect debts on a regular basis.
How may a debt collector contact you?
A collector may contact you in person, by mail, telephone, telegram, or FAX. However, a debt collector may not contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves.
Can you stop a debt collector from contacting you?
You may stop a collector from contacting you by writing a letter to the collection agency telling them to stop. Once the agency receives your letter, they may not contact you again except to say there will be no further contact. Another exception is that the agency may notify you if the debt collector or creditor intends to take some specific action.
May a debt collector contact any person other than you concerning your debt?
If you have an attorney, the debt collector may not contact anyone other than your attorney. If you do not have an attorney, a collector may contact other people, but only to find out where you live and work. Collectors usually are prohibited from contacting such permissible third parties more than one. In most cases, the collector is not permitted to tell anyone other than you and your attorney that you owe money.
What is the debt collector required to tell you about the debt?
Within five days after you are first contacted, the collector must send you a written notice telling you the money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.
May a debt collector continue to contact you if you believe you do not owe money?
A collector may not contact you if, within 30 days after you are first contacted, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
What types of debt collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress, or abuse any person. For example, debt collectors may not:
-- falsely imply that they are attorneys or government representatives.
-- falsely imply that you have committed a crime;
-- falsely represent that they operate or work for a credit bureau;
-- misrepresent the amount of your debt;
-- misrepresent the involvement of an attorney in collecting a debt;
-- indicate that papers being sent to you are legal forms when they are not;
-- indicate that papers being sent to you are not legal forms when they are.
Debt collectors also may not state that:
-- you will be arrested if you do not pay your debt;
-- they will seize, garnish, attach, or sell your property or wages, unless the collection agency or credit intends to do so, and it is legal to do so (garnishment is currently prohibited in South Carolina for the collection of most debts):
-- actions, such as a lawsuit, will be taken against you, which legally may not be taken, or which they do not intend to take.
Debt collectors may not:
-- give false credit information about you to anyone;
-- send you anything that looks like an official document from a court or government agency when it is not;
-- use a false name.
Unfair practices. Debt collectors may not engage in unfair practices in attempting to collect a debt. For example, collectors may not:
-- collect any amount greater than your debt, unless allowed by law;
-- deposit a post-dated check prematurely;
-- make you accept collect calls or pay for telegrams;
-- take or threaten to take your property unless this can be done legally;
-- contact you by postcard.
What control do you have over payment of debts?
If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.
What can you do if you believe a debt collector violated the law?
You have the right to sue a collector in a state or federal court within one year from the date you believe the law was violated. If your win, you may recover money for the damages you suffered. Court costs and attorney's fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.
Where can you report a debt collector for an alleged violation of the law?
Report any problems you have with a debt collector to the Department of Consumer Affairs and the Federal Trade Commission.

I really hope this information helps. In such tough economic times, I understand the need for fast cash. Sell something, anything, first before getting yourself into this mix!

No comments:

Post a Comment