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Posted: Tue Apr 04, 2006 5:34 pm Subject: got a question...

Hi guys..
Lately a big topic seems to be that if an online lender is not liscensed to loan in your state, and they never seem to be, then you are not legally required to pay them back. Do I have this right?
Well, what about payday loans that have been sent to collections? Does this apply to them as well? I guessed that since the lender no longer owns the debt, then you are legally obligated to pay, am I right?

Posted: Tue Apr 04, 2006 5:36 pm Subject:

If the collection company shows you validation of the debt, then yes. If you have a signed contract in front of you, along with the deposit information into your bank, then you will be required to pay the collection company.

Regards-
Mike

Posted: Tue Apr 04, 2006 5:36 pm Subject:

I'd say no. Get a list together of you internet lenders, with the amount paid in principal and the amount paid in interest.

Posted: Tue Apr 04, 2006 5:40 pm Subject:

well.. I did not ever think to ask a collection agency for debt validation. they don't include very much info in their letters. Thanks guys.

Posted: Tue Apr 04, 2006 5:43 pm Subject:

Posted: Tue Apr 04, 2006 6:44 pm Subject:

That is what I figure. Each time I read a post about someone refusing to pay a lender back, I think to myself, "If they applied for and were approved for the loan, and USED the money, then aren't they required to pay them back regardless of licensing?" I mean, did any of us think to look up licensing BEFORE we took out the loans? I know I didn't. I was just so desperate to get the money, I don't think I gave that a moment's notice. So, I think we should simply put everything we owe with a consolidation company and get the loans WE TOOK OUT OURSELVES paid back civilly.

Now, it is a different story when you KNOW you didn't apply for a loan, but the company is illegally debiting your account. Then, you have just cause to fight those charges. As for the loans we all received with our knowledge, I think it's just time we suck it up and start paying for what we owe.

On a positive note, this forum has been so inspirational for me. Not only in helping relieve some of my stress but it has provided me with a tremendous amount of education that I may have not ever received otherwise.

So thanks to you all.

Posted: Wed Apr 05, 2006 4:36 am Subject:

(1) If a debt collector "buys" the debt, they're still a "debt collector" as that term is defined by the [url=http://www.debtconsolidationcare.com/fdcpa.html]fdcpa[/url].

(2) [url=http://www.debtconsolidationcare.com/handle-collectors.html]debt collectors[/url] who "buy" debts acquire a large package all at once of many claims, and they make no attempt to evaluate every claim in the package. The purchase is really a discount procedure that reverses the normal order of commissions, like buying junk bonds, they pay pennies on the dollar for the total cost of the grab-bag of bad debt, and the amount of the discount relates not to the legality of the debt, but the collectibility of the debt - two different things, since many people will believe they really have to pay up and will pay up (or get on a treadmill whereby they pay too much on a weekly or monthly basis for the rest of their lives) because they think it's a moral issue not a legal issue, and they believe it when "the authorities" tell them they owe the money.

(3) The quick answer to your central question is an unqualified, "maybe". Whether or not you owe the money (in a legal sense) to an unlicensed lender depends on the laws of your state, and possibly of the United States. By virtue of their power to coin money, the U.S. controls the Federal Reserve Banking System and charters National Banks without any regard for state law. At the other end of the lending scale are the internet based payday loan companies that are regulated entirely by state law. There's lots of kinds of loans and lots of kinds of lenders and the laws on that subject are a crazy-quilt. Since you used the terms, "online" and "payday", I'm assuming that you're talking about an unlicensed payday loan made to you in a state that requires payday loan companies to be registered. A similar circumstance would obtain where the payday lender, whether licensed or not, charges fees and interest in excess of the limits imposed by your state law.

More discussion: "unlawful" is not the same as "illegal". An act is "illegal" if you can be prosecuted for a crime as a result of the act; an act is "unlawful" if it's not authorized by law. You need to know whether the loan company acted unlawfully or illegally (if the latter, then the contract is void and unenforceable). If it was merely unlawful, then you need to know whether the lender can still sue you, a matter of statute in the state where you live.

Anyone claiming under the lender's original claim has no better rights than the lender did. And if the original lender had no rights, there is no way that a debt collector can enforce the debt, whether they respond to a demand for validation or not.

My opinion of the usual way this kind of thing would work is that you could be legally obligated to repay the principal, since that doesn't require a license or involve the excess fees and interest issue. But you generally do not have to pay anything more than the original amount actually loaned to you, no interest, no fees, no commissions, no charges.

Posted: Wed Apr 05, 2006 11:41 am Subject:

Maybe I worded my question wrong. I hope no one got the idea that I don't intend to pay my loan back, it's not like I took the money with the intent to scam them..My loans are all really small, I had actually been making payments on the principle of all of them before I defaulted. I am making regular payments and actually making headway now, I should be free and clear within 6 months ( I hope). I only have one at a collection agency, and I wondered about the extra fees and collection costs. I suppose my question was mainly out of curiosity, since I see that many people have had success with lenders who are not licensed. Thanks for the help!

Posted: Wed Apr 05, 2006 11:51 am Subject:

I'm in the same boat. I never said that I'm not going to pay...but these people, SONIC/PRL/CASHTRANFERCENTERS and whatever else they call themselves, are unwilling to work with me. I asked if I could pay them in installments, and they said NO, so, I am actively trying to pay them.
So, it's not that I'm dodging my obligation to these people.

Posted: Wed Apr 05, 2006 11:56 am Subject:

I feel the same way all. But most of these people have collected above and beyond the principal balances and it really is unfair that they are unwilling to work with you, especially after you have called them to make an honest effort.
They should have to abide by the laws of your state on interest rates, had I know there were laws like that I would have felt differently about obtaining these loans.

Posted: Wed Apr 05, 2006 1:29 pm Subject:

Y'all clearly feel a moral obligation to pay someone who, as a legal matter, is not entitled to be paid. And I don't want to get in the way of that - as John Travolta's character said in "Michael", "It's not my area."

But let's consider alternate moral issues. There's the "I think I owe a legitimate debt, so I ought to pay up." issue; then there's the "I should help criminals who are ripping off Americans through illegal payday loan scams in order to fund terrorism." issue.

If you're dealing with a licensed payday loan company that's charging interest and fees in accordance with the laws of the state you live in, then I applaud your sense of moral responsibility.

But, if you can't tell what the true name of the company you're dealing with is, and it appears that they're not located in the U.S., and they're not registered with your state government, and they're charging interest and fees in excess of what your state law says is permissible, and they don't have a mailing address, I respectfully suggest that you might want to reconsider your priorities.

Posted: Wed Apr 05, 2006 1:33 pm Subject:

ok, well, how do you find out what the laws are in your state, and if you applied for and recieved an online payday loan from a company not licensed in your state (mine, TX) then how do you fight it? How do you you legitimately prove that they are "unlawful" and go about not re-paying the outrageous fees?

Posted: Wed Apr 05, 2006 1:44 pm Subject:

Posted: Wed Apr 05, 2006 1:46 pm Subject: Synopsis of Texas

Posted: Wed Apr 05, 2006 1:47 pm Subject:

Hey everybody..please read my posts regarding my calls to the Fl.Board of prof regulation and financial department.
I think I'm getting somewhere with this....

Posted: Wed Apr 05, 2006 2:00 pm Subject:

pollyandsay,

does that mean that the loan company can only charge me $18 per $100 (loans<$300) or else it is considered unlawful?

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