Is there anything we can do, or are we screwed?

I haven't come across a post of anyone who has actually been prosecuted by a collection agency who was hired by an illegal lender. So far, all I have read from various members is how they are being harassed and threatened, to my knowledge, I have not read where anyone has actually walked into a court of law as a result of defaulting on a loan from an illegal payday lender.

some have however put through a WAGE ASSIGNMENT which is voluntary,revocable,and doesn't need a court hearing.that is why shazz,me,and others always advise to give your HR person a WAGE ASSIGNMENT REVOCATION letter.once that is done then they really can't do anything except what shazz said.alot of pointless threats they can't and won't carry out.that is also why complaints should be filed.

I haven't been online in awhile, I am sorry I agree with Paul and Shazz.. once your bank account is closed and you send off your letters, you might find that they are even willing to settle for what you already paid them. illegal lenders are usually happy with the principal as they know they are wrong.
i understand where you are coming from.. we all strangers to you and it is always smart to question all advice. but they truly are not legally allowed to lend to you, therefore this loan is not legal. do what is in your heart but i would hate to see you suffer to pay them off.

Just wanted to give an update, in case anyone is still following this thread.
After the 4th ACH transactions hit our account (bringing the total paid on each $400 loan to $480), we have now CLOSED our bank account. We have been assured by the bank that they will NOT allow any ACH requests to "re-open" the closed account. (Sounds like they are familiar with this scam.)
I'm in the process of typing up letters to both companies, to be both emailed and snail mailed. I am demanding that they not contact us by phone, but only in writing. And, I'm asking for a refund of the $80 paid over and above the principle. I have also checked out the online complaint websites for the BBB, La Atty General, the Internet Crime Complaint Center, and the Federal Trade Commission, and will be filing complaints with all of them in the next few days, now that the bank account is closed.
Thank you all so much for the good advice! I'm so glad I found this site before we paid them another dime! (Too bad I didn't find it prior to, but oh, well...)

you are on the right track thanks for the update keep us posted!

The week in review:
Closed bank account Monday.
Sent certified letters to both PDL companies on Tuesday.
Both emailed and faxed copies of same letters to PDL co's on Wednesday.
Began filing online complaints at websites of the BBB, LA Atty Gen, FTC, & IC3 Thursday.
Finished filing complaints, and sent either faxes or snail mail letters to above entities on Friday. ***Whew!!!***
So far, not a word from the PDL co's...the crickets are chirping...

Keep up the good work!