Dealing With Illegal Payday Lenders

Many people rely on payday lenders when they need extra cash during financial emergencies. However, many lenders are operating illegally and charge very high fees. A lender is deemed illegal if it is not licensed to do business in the state where it is located. In Massachusetts and Florida, payday lending is not allowed by law. You can check with the Office of the Attorney General in your area to make sure that the loan provider you are considering is properly licensed. If you think that you have been victimized by an illegitimate payday loan provider, here are some of the things that you can do.

Close Your Account

Once you have confirmed that your payday loan provider is unlicensed in your state, your next step is to close your account immediately. However, illegal payday lenders have a reputation for ignoring revocation orders and they may continue to withdraw money from the accounts of their borrowers. So, it is important that you also inform your bank, particularly the branch manager, that you are revoking ACH authorizations from the illegal lender. If you have other bank accounts, you can opt to just close the one that can be accessed by your payday lender. This will ensure that such account will no longer be debited with any amount.

Inform Your Employer about the Illegal Lender

Illegal payday lenders are very creative when it comes to getting what they want. To prevent your employer from giving away your bank information, you need to notify your payroll department about your problem with the illegal payday loan company. Ask your human resources department not to honor any request to remit your salary to any loan provider.

Write Your Lender

It is very important to communicate with your lender. You can send a letter via email or certified mail and tell the company that you have found out that they are operating illegally. Be sure to specify that they are not allowed by law to charge interest or any fees on your loan. You should also inform them that you have revoked all the wage assignments and debit orders that you have signed with the company. Most importantly, be sure to tell them you are not allowing them, or any of their agents or representatives, to contact your employer to request access to any part of your salary.

In your letter, include your intent to file a complaint against them with the Office of the Attorney General in your state, the Federal Trade Commission and the Better Business Bureau. It is also important that you demand a reply from them via mail within a specified period of time.

File a Complaint

In order to ensure that illegal payday lenders will not be able to prey upon other people, it is your moral responsibility to file a formal complaint with the authorities. If you receive threats or you are being harassed by your payday loan provider, do not hesitate to include that information in your report as well.

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