With the increasing demand for short term loans, there is also an increasing number of illegal lenders of payday installment loans out there. On the internet, some lenders have been ripping off so many consumers because the borrower does not know that they are operating illegally in their states or may not know how to deal with them. Usually, these illegal lenders will force 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 that you too are not aware of it, they have domination over you.
If you have been one of the victims of these illegal lenders, take heart because there are ways to deal with them lawfully. The law has provisions to protect consumers of payday installment loans from these unlicensed and illegal lenders. In fact, many consumers have already reported paying thousands of dollars to these illegal lenders without knowing they should only have paid the principal amount. Yes, you read it right! If you took out a payday installment loan from an illegal lender, you are only required to repay the principal amount you have borrowed with no additional interest charges.
But in case you are already in the illegal lenders trap, here are some tips that will help you deal with them:
1. Get in touch with your State’s Attorney Generals office. You may do an online Google search for the website and then get the payday installment loan laws of your state to confirm if the lender you are dealing with is really licensed to operate in your state. For example, in the states of Florida and Massachusetts, the operations of all online payday installment loan lenders is illegal. After confirming this, you can do the succeeding steps.
2. Immediately close your bank account. Go and approach the banks manager personally to block your account because you have dealt with an illegal lender. Also, let your bank know that you are revoking any ACH authorizations from illegal loan companies. You need to do this for the protection of your money from been withdrawn by these illegal lenders. You may furnish a copy of the payday installment loan laws of your state to the manager. Most banks, after finding sufficient reason, will immediately close your account.
3. Aside from informing the bank, you also need to inform your employer about your action against illegal lenders so that they will not honor any request from them to send your wages to them. Usually, some payday installment loan lenders apply wage garnishment for unpaid debts. So be sure to inform your employer regarding this situation to protect your hard earned money.
4. You can also inform the illegal lender of payday installment loan through sending them an email or a letter. For online lenders, you may need to research their email and physical address. You may use the Google search by typing in their name. Also, let them know that you have researched their illegal status to operate in the state, so you will only pay them back the principal amount excluding the additional interest rate charges. Furthermore, inform them that you are revoking all authorizations of wage garnishment you have signed with them, and so forbid them, including their agents, from having access to any part of your wages, or contacting your employer to collect your wage.
In addition, tell them that you have revoked ACH authorization to any of your personal accounts, and you have closed your bank account 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. Once the lender is informed, you should expect a response from them within 5 days. The response is through email or letter and usually doesn’t include a call.
5. Finally, file your complaint with the Federal Trade Commission, the Better Business Bureau, and with your state’s Attorney General’s Office.