There are many illegal or unlicensed payday lenders out there on the Internet reaping off so many people because these people do not know they are operating illegally in their states, or do not know how to deal with them.
If you fall victim of these illegal payday lenders, be prepared to be milked dry. They will box you into a tight corner and make you to continue paying them over and over again, even though they know they are not licensed to operate in your state. But because they know you too are not aware of it, they go on having a field day on your money.
Many people have reported paying thousands of dollars for a loan of three hundred dollars to these illegal payday lenders without knowing they should only have paid the principal they took. That's right! If you took a loan from illegal or unlicensed payday lenders, you are only required to pay back only the principal that you took – no interest charges whatsoever. Therefore, if you are already in a payday lender's net, the following information will very well help you to avoid been taken to the cleaners.
Find Out If They Are Licensed In Your State
Get in touch with your state's Attorney General's office. You can do a Google search for its website online, and from there get the payday loan laws of your state to confirm if the lender you are dealing with is licensed to operate in your state or not. For the states of Florida and Massachusetts, the operations of all Internet payday lenders are illegal. If you discover the payday lender is illegal or unlicensed, then take the following action immediately:
Close Your Account
Close your account immediately. But be aware that they have the reputation of not carrying out revocation order, and so may not close the account, therefore go to your bank and tell the Manager you want a hard debit block immediately placed on your account.
Let them know you are revoking ACH authorizations from illegal companies, and you need to do this to protect your money from been withdrawn by them because you understand that even though you have closed your account with them these companies don't carry out revocation orders. You can print out a copy of payday loan laws of your state and give it to the Manager.
Ensure your bank heeds to this request
To be on the safe side, it is better you close that bank account to prevent the payday lender from later trying to debit your account as they already have your bank account details. Also, inform your employer about your action against payday lenders so that they don't honor any request from any payday lender to send your wages to them.
Send Email And Letter To The Payday Lender
You will need to do a little research online for the email and physical addresses of the payday lender – type in the payday lender's name into Google search and you will be able to get it. Send them an email as well as a letter to their physical address (this is good for your documentation).
Let them know you have researched and found they are illegal to operate in your state, therefore you will only pay back the principal sum, which is what you are supposed to pay even if their payday loans were licensed to operate anywhere in the US. Tell them you have revoked all wage assignments you may have signed with them, and so forbid them and their agents from having access to any part of your wages, or contacting your employer for the purpose of collecting your wage.
State that you have revoked ACH authorization to any of your personal accounts, and that you have closed your bank account, which they know about to safeguard your interest. Let them know you will be filing complaints against them with the Better Business Bureau, the Federal Trade Commission, and with your state Attorney General's Office.
Finally, tell them you expect a response from them not later than five days time, and the response will have to be through email and / or letter – no phone calls.
File A Complaint
You can file your complaints online against the payday lender with the Federal Trade Commission, the Better Business Bureau, and with your state's Attorney General's Office. Here are the links to filing complaints with: Federal Trade Commission; Better Business Bureau. Now, be prepared to receive threatening phone calls from the payday lender after they have found out what you have done against them.
But don't worry, since they are unlicensed and illegal, that is the best they can do. Simply hang up the phone on them, don't reply or respond, but keep sending certified letters to them, you are right on top of the show and you will settle it in your own terms.
Make Payments In Your Own Terms
If you haven't paid up to the principal sum you took from an illegal / unlicensed payday lender, get a written agreement with them on how the loan is to be settled, and make sure to only send payments through money order and not through prepaid cards. They will usually demand you send payments by prepaid cards, but that will cost you some charges, so insist on money order and send it to their physical address.
If you have paid an unlicensed and illegal payday lender more than the principal sum you took, you should ask for a refund and a letter or receipt stating you have paid in full from them. It is possible you might get one of the two or both.