Utah Financial Reg Dept

So this is what the Utah Financial Regulations dept had to say:

From: Jerry Jaramillo [mailto:jjaramillo@utah.gov]
Sent: Tuesday, May 27, 2008 11:03 AM
To: ME
Subject: Re: Fwd: complaint form about illegal payday loan to MDresident

The suggestions that I would provided in this circumstance appear to have been addressed by you.

First, I would close your checking account and open a new one to prevent any more debits based on the banking account information you provided this lender. You state you have already talked to your bank in this regard.

Secondly, I would contact the Maryland Banking Department for assistance in resolving the lending activity conducted by this entity. The Maryland Banking Department has jurisdiction over all consumer loans made to Maryland residents.

Unfortunately, the internet is full of unauthorized lenders, who may appear to be legitimate but are not. Often times they will give a post office box as a location, however, no internet payday lender operates out of a post office box. Generally, unscrupulous internet lenders do obtain a PO Box in a state simply to avoid any regulatory agency from finding them. Sometimes they operate from a foreign country where no federal law or state law has jurisdiction.

On a positive note it is unlikely that the lender would pursue the collection of your account legally. The reason is simply they do not want to address the issue of not being registered as an authorized lender in the state where the borrower resides. You have to be an authorized lender in a state to pursue legal remedies in terms of collection efforts in a state court. Additionally, unauthorized internet lenders do not belong to the credit reporting agencies because to do so they would have to abide by certain guidelines which they don't want (such as a legitimate business address). They prefer to intimidate borrowers into paying them on a loan that by your description is illegal.

FIGHT FIGHT FIGHT!!

This is good information to have. It really gives me more confidence to know that the state regulators are not acknowleging the internet lenders and are not upholding their collection practices.