Is this legal?
Date: Tue, 06/29/2010 - 07:17
Thank you for any reply you may have.
Was this an internet or storefront loan? I was unable to find a
Was this an internet or storefront loan? I was unable to find an Alabama license for either company name on the State of Alabama's Banking Department license search engine so they may be illegal in your state.
You cannot be charged criminally for not paying on your loan, debt unless there is an issue of fraud is a civil matter. However, if you do not make alternate arrangements to pay on your loan you could be sued in small claims court for collections and forced to pay the other party's court costs and attorney fees as damages.
Quote:Originally Posted by OVLG AttorneyWas this an internet or
Quote:
Originally Posted by OVLG Attorney Was this an internet or storefront loan? I was unable to find an Alabama license for either company name on the State of Alabama's Banking Department license search engine so they may be illegal in your state. You cannot be charged criminally for not paying on your loan, debt unless there is an issue of fraud is a civil matter. However, if you do not make alternate arrangements to pay on your loan you could be sued in small claims court for collections and forced to pay the other party's court costs and attorney fees as damages. |
It was an internet loan, finalized over the phone. I can't find them in the Alabama database either. So all I'm required to pay then, is the original $300.00?
Dear OVLG Attorney, Shazzers says they dont have a license, so
Dear OVLG Attorney,
Shazzers says they dont have a license, so the borrower only needs to pay the principal.
So why do you later say "...if you do not make alternate arrangements to pay on your loan you could be sued in small claims court..."?
Thanks
Quote:Originally Posted by Amanda MurrayIt was an internet loan,
Quote:
Originally Posted by Amanda Murray It was an internet loan, finalized over the phone. I can't find them in the Alabama database either. So all I'm required to pay then, is the original $300.00? |
If an Internet payday lender does not follow the law by obtaining a license to lend required by your state, then they aren't entitled to interest and fees, all you would owe them is the amount you borrowed to begin with, less any payments you have already made.
The reason I say they aren't entitled to the interest and fees is because, usually, unlicensed/illegal lenders usually charge interest and fees not allowed by law (much higher than you state laws would allow, had they been licensed, as required), and since they aren't licensed to lend in your state (as YOUR state law requires), they can't really sue you, unless they want to run the risk of going to court knowing it could backfire on them for not following the law, I just don't think these lenders are willing to risk that. Although they may decide to turn this debt over to a collection agency, but I wouldn't be too concerned about that because you can easily have any negative remarks removed from a collection agency with the simple fact that the original creditor was not licensed to lend in your state. Plus there are laws to protect you against third party collectors, but you can cross that bridge IF you ever come to it.
