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A response from the IDOB already!!

Date: Mon, 05/05/2008 - 21:13

Submitted by Nathan52101
on Mon, 05/05/2008 - 21:13

Posts: 7 Credits: [Donate]

Total Replies: 7


I sent this email on Sunday and this is the response i got back...

Dear Nathan xxxxxx:



Thank you for your emails concerning online payday lenders. You listed several concerns and I can only report that these companies present real problems for the people who use them.



Our office does license payday lenders who operate from locations in Iowa. We have refused to license any internet payday lenders. So, in short, these companies are not operating legally here. However, we have been unsuccessful in stopping their activity. Most of these companies do not intend to operate within any legal framework and take advantage of the internet’s anonymous nature to mask where they are from and what terms you agree to in checking a box.



“I am finding it hard to get in contact with them in order to work out a payment arrangement.”

This is one of the real problems we have with these companies. They can be anywhere. I have tracked some companies down that eventually looked like they were from Malta, some Caribbean Islands, and Native American territories. Even the ones that look like they may be from locations in the USA may only have a PO Box or a shared computer server somewhere here. I have never received a response to letters I have sent asking for additional information.



“Several loan sites deposited money into my account without me knowingly authorizing them or receiving email or phone correspondence.”

Usually, it only takes you clicking a box to agree to terms. However, you will have to give them information in order to have them accept your application: name, address, work information, bank account info. I have gone online and looked at several companies. I wanted to look at the written terms the companies were offering and had to input a substantial amount of information to get to screens with the written loan agreements. However, I just canceled the transaction. I never got funds or any other contact from the sites.



If I had to guess, you probably did agree to the loans, but it was just by completing information and clicking “submit” or checking a box.





“Is there anything you can suggest to try to get out of this cycle?”

You may want to consider closing your account and eliminate any access they have to you.



“I think they are illegally going into my wife’s bank account and taking funds.”

This is a question that we may not be able to resolve. In the online payday loan agreements I have reviewed, the terms include your acknowledgement that you have authority in the account to accept deposits and authorize withdrawals from the listed account. However, I think you can tell your bank that you have withdrawn any authority for these companies to take money from your account.



“Are there any laws that would protect us? We want to close our account and open another to protect us from incurring any more fees from these lenders.”

Because these companies are not licensed to make loans to you, I do not think they can collect interest. However, these guys are not legitimate lenders trying to make good loans, they are bad guys who do not care if they are licensed or not; they do not care if they violate the law or not.



This lack of legality is a problem and an opportunity for you. The problem is that they will hassle you, try to scare you, and potentially cause problems for you. If they have your employer’s name and telephone number, they may call and ask about your employment 20 times a day. They may also tell you that they are going to have you arrested for fraud or that they are going to sue you in civil court.



The opportunity is that they cannot have you arrested for not paying a consumer loan (the country got rid of its debtors’ prisons a long time ago) and they know they will not win if they take you to civil court – because they do not have a legitimate loan agreement.



I am not an attorney and cannot provide you with legal advice, but please call me at the number listed below and we can talk about some potential options have these lenders stop withdrawing funds from your accounts.



Sincerely,



Stuart W. McKee

Assistant Finance Bureau Chief

Iowa Division of Banking


Nathan I'm glad you received a response, and it was a real person typing it! Not a form letter, that in itself is a success!

I am not an attorney and cannot provide you with legal advice, but please call me at the number listed below and we can talk about some potential options have these lenders stop withdrawing funds from your accounts.


If it were me, I would contact the ACH processors, that seems to be a swift and effective way to stop the withdrawals. :wink:


lrhall41

Submitted by Shazzers on Tue, 05/06/2008 - 05:16

( Posts: 17344 | Credits: )


More responses from IDOB regarding payday loans




Nathan:



Your note shows me that you are doing what you can.



I do not expect that additional legislation will eliminate the problems people are having. The problem is not that these online payday lenders represent good companies or individuals who want to follow laws protecting consumers, except the law is unclear or not expansive enough to cover the transaction. The problem is that a lot of these companies have no interest in following any laws that protect consumers. They locate in places that make it difficult to take action against them or just make themselves hard to find.



In doing research on these companies, I found organizations usually fall into one of three groups: Legitimate lenders who want to comply with local regulations (these people usually do not offer loans in Iowa because we think our laws preclude us from issuing them a license); payday lenders who do not consider complying with local regulations (I think this is the most common group. They follow the terms of their written agreements with borrowers, but these agreements violate state fee limitations and have terms that state laws would not allow ???????? I recently spoke to one women who told me one of her online payday lenders tried to withdraw her interest payment from her account 17 times in one day, causing her $578.00 of NSF fees.); and computer criminals who are just trying to get your account information or other personal information for identity theft.



My overall recommendation is to never borrower from an online payday lender. [Also, never send money to a lender for an unsecured loan. The fee for loan scam has been around for years. The consumer will respond to an advertisement in the newspaper or to a telephone call and make an application over the telephone. The ???????lender??????? takes the application and gets back to the consumer later the same day or the next day. But, they require the consumer send money to them to purchase some kind of credit insurance ???????? a policy that will pay if the consumer defaults on the loan. The consumer usually has to wire money to a bank or money service provider in Canada. After the consumer sends the bad guys this money, the consumer never hears from them again. There is no loan; there is no lender ???????? the only thing at the other end of this communication is a crook who just stole the consumer????????s money.]



I wanted to make sure you were aware that these online payday lenders would probably threaten to sue you or threaten to make a criminal complaint. I have heard from several people who said their online payday lenders made these threats. I have yet to hear from one consumer that their online payday lender followed through on any of these threats.



If you receive some kind of summons to appear in either civil or criminal court, I definitely want to hear about it.



Let me know if you have other questions.



Stuart



Stuart W. McKee

Assistant Finance Bureau Chief

Iowa Division of Banking

200 East Grand Avenue, Suite 300

Des Moines, IA 50309

Telephone 515-281-4014

Fax 515-281-4862

stuart.mckee(at)idob.state.ia.us

From: Nathan xxxx email removed for your safety. cannr
Sent: Monday, May 05, 2008 11:20 PM
To: Mckee, Stuart [IDOB]
Subject: RE: Online payday loan companies "plaintextonly"



Thank you for your timely response. I talked to our bank today and they will be closing it once some legit checks go through and i give them the okay. We will then be opening a new account with only my wifes name on it, and me nowhere to be found on it. I am sickened by how these companies can take advantage of someone. Do you know if there is any plans in legislation to try to get something done about these lenders, or is not giving them a license about the only thing that can be done. I will be sending all of these companies C & D letters asking for them to only contact me through email, as well as ACH revoke letters. I would like to give you a call but it seems I work all day everyday,(who doesn't really) but if i can i will, if not, would you like me to keep you informed how my progress is going through email at least?

Thank you again,

Nathan xxxxxx


lrhall41

Submitted by Nathan52101 on Tue, 05/06/2008 - 16:50

( Posts: 7 | Credits: )


Wow! That is amazing what this companies are willing to do not to help you to pay back their money. Then on top of that 99.9% of them are illegal to begin with. I am glad that you got to close your account and but your wife's name on the account only. I had a similar problem when I had another account and Fast Cash and Pay Day Loan Yes found that account and tried to make withdrawals from it. Now that account is frozen until I get the refund check from the Government, then that account will be closed and I will open up a new account.


lrhall41

Submitted by wssu92 on Tue, 05/06/2008 - 17:07

( Posts: 510 | Credits: )