New and fell into the PDL trap!

Hi! I am new, just found this site and am avidly reading everything I can. I am in Texas and have a single payday loan with EZmoney. This is actually the second pdl I have had with them. The original amount was for $600.00 My finance charge was almost exactly at 41% a month, I slowly made small payments over the finance charge, and each new finance charge was at 41% of the new balance. I am now down to $300.00 but have defaulted. I had a bunch of stuff going on and forgot to go in and make the payment, but called the next morning to say I would be in…too late! They already submitted to my bank, it bounced and they sent it to their collection department.

My bank is currently neg over $900 so there is no chance of them getting anything (they helped rack up the fees). I did manage to make arrangements with the bank so that I could make payments on the balance and keep my bank account plus they said I could just dispute anything they send in and they will take it off (they said they have lots of trouble from them).

I just got a collection letter and it states I entered into a CSO agreement with them and a place called NCP Finance Limited Partnership. This is news to me! Never once did they even breathe a mention of this CSO stuff and lead me to believe the loan is from them, heck, I remember the contract stated the charge was a finance charge and not a CSO fee! I can’t find my copy of the contract so I asked them for a copy..I bet anything this CSO crud is buried in the fine print! This smacks of deceptive practice IMO!

The way I would pay it is different from what I read here so far…I gave them one check at all in the beginning, then each month I would come in, pay the 41% and leave (sometimes paying more then the 41% to try and knock down the balance). I would not write another check, just sign a fresh agreement or contract stating the new finance charge and new balance.

I think they purposely don’t mention any of this CSO stuff, and are in fact using it to get around Texas law (they are not licensed, they used to be, but they let it go in 2000). I had absolutely no knowledge of this CSO stuff before the loan (walked in, place makes you think they are the lender) during the signup or whatever (they never breathed a word of it) and I don’t remember ever seeing anything in the contract (it must have been buried in fine print).

This is very frustrating.

Have you contacted the state yet? If not I would ASAP because if this is a storefront lender then they have to be licensed. I would file a complaint with the AG and DFI. Plus if you were paying them down and they cashed your check for the original amount, that is not right. I haven't heard of a storefront doing business like that. But also check out the collection agency that has your account and see if they have any complaints against them. The more info you have on these places the better off you are. This way they don't scare you into paying.

I am sure that someone else will be along that knows more about the CSO. So hang tight and keep checking back.

golden....Goudah knows all about the CSO thing...try to PM her and ask her to look at your post...she could explain it to you....she is one of our experts!!

Well, since reading about this CSO stuff I'm not sure they need to be licensed, since they are trying to say they are a CSO..its just that they don't -act- like anything other then a payday lender.

They did not 'cash' the original check, they just hit up my bank for $453 (in the collection letter it states this is principle, interest, CSO Fee and NSF fee.) But I am almost positive that the contract stated just a 'finance charge' nothing about a CSO fee.

The collection is in-house, it is still EZmoney, just thier collections dept.

They don't scare me, Im so annoyed im tempted to take them to small claims court, jury trail and plead my case that they were deceptive and are using this loophole to deny me my rights under texas law.

CSO's don't have to be licenesed, only registered with the Secretary of State. It's a virtually unregulated industry.

All the storefronts in Texas use the CSO model for payday lending. It is legal, unfortuantly. All they have to do is help you get a loan, and they can claim they are a CSO. Sucks, huh?

Federal courts have found that fees charged by a CSO cannot be considered interest, so when a pdl acts as a CSO they can get around many state's ursury laws. That is why they do it. It's a relatively new thing.

If you went to court over it, you probably would lose. What they are doing is totally legal. By law they are allowed to service the loan, which is why you thought the loan was with them.

Do you have the contract? If not, you need to get a copy. It would have to say in the contract that they are not the lender, that they are a Credit Service Organization, and that they will be the ones servicing the loan on behalf of the real lender.

I think your only way "out" of this would be if the contract didn't say anything about being a CSO. I'm going to try to find the Texas laws on exactly what the CSO must do, and I will post them here for you.

So you can go in and they must show you their registration certificate. Not that it is hard to get, you just pay the fee and give:



Sounds real hard to become a CSO in Texas!

Wow! What a headache. They may be legal, but until I get a copy of the contract I won't know for sure but so far, from looking at the law for CSOs I know they are in violation of one, possibly two:


-- they did no such thing, at all! As I said before, I had no idea they were a CSO..I never even heard of it until I got the collection letter. Even thier little brochure at the desk doesn't make any mention of them as a place to help you with credit! They do offer an 'option' that they will report your good payments, but they never did any such thing with the first loan and that was completely paid off in good standing, so they even lied about that!

The other section they may be in violation in:


-- They were totally deceptive about the whole thing, they never disclosed -anything- to me, at all.

Is it possible the disclosure statement was in the contract? That is all they would have to do, they wouldn't have to actually say anything to you about it.

Hmm yeah, but that first law I quoted, states that this information must be made available BEFORE a contract is executed, so if they just put it into a contract without first disclosing to me, isn't that a violation?

I don't know that you could claim fruadulant or deceptive practices. If it says CSO anywhere in the contract then they weren't deceptive. It may seem that way to you, but legally that isn't considered a deceptive practice because it is clearly stated in the contract.

I think you need to get a copy of that contract before you do anything else. That will give you the answers on what they did right or wrong. Most places will give you all the paperwork together, so the disclosure could very well be there.

Not necesarily. The contract is not executed until the loan is "funded".

Too bad there isn't any stipulation about a CSO having to display they are licensed as a CSO, or a law against a CSO in Texas working with a lender who is NOT licensed in texas (the NCP leander is not licensed in texas).

Yeah, the whole idea of payday lenders operating under the CSO model sucks. It's a wonderful way for them to avoid any payday loan legislation, and operate in a virtually unregulated field.

I agree..I will just have to wait for the contract. I sent a letter to them asking for it, which I am entitled to under texas law, I also included a limited cease & desist to no phone calls..if I can't get them on the loan/cso stuff, maybe they will violate under the debt collection laws

Just so you know, the fdcpa doesn't apply to the original creditor, only third party collectors. Which in this situation is a bit unclear, because most would consider a CSO a third party, since they are not the lender, but they have a contract with the lender to service the loan, so that makes them the original creditor. Messed up. But state collection laws would still apply.

Yeah, tricky with the fdcpa, I am mostly going on texas law itself.