Check your state laws...

Well, that's sort of right. They certainly can file suit, and if you do nothing to contest the suit, they can get a judgment against you. Further, the fact that a suit has been filed against you may show up in a credit report even if the suit is totally bogus.

I'm with you, myself, I would simply not pay, on the theory that the contract is unenforceable, but then (1) I'm not terribly risk-averse and (2) I love litigation ("please, PLEASE don't throw me into that briar patch").

If you do have any problems with that stuff in Maryland, I recommend Alan S. Town, a lawyer in Rockville, Montgomery County.

But the question I have is what would you do if one of these lenders reports you to the credit bureaus?

I have a case like that. But for the rest of them, I am thinking of not paying them because they were not licensed to lend me the money in the first place. I will fight them thru my complaints with AG of my state.

Be careful to distinguish between your interest and the state's interest. The state A.G. is going to take action based on whether the dignity of the sovereign state has been offended. If you wait to see what he's going to do, you can be sued in the meanwhile or lose your right. You have to protect your rights, the A.G. will protect the interests of the state (as to which you're merely a witness, even if you're the one who complained). See, that's the trick: you have to take the time and money required to protect yourself against the scam artists and loan sharks, and if you don't, the system will reward them.

Oh, and if one of them reports you to the credit bureaus, and you (1) don't feel you owe the money and (2) have noted your dispute in writing; then you should (1) write to the credit bureaus telling them that the information they have is bogus and you don't owe the money and the matter is in dispute, and (2) consider suing anyone who makes a false report about you to a credit union under the Fair Credit Reporting Act.

Let's say one of these illegal internet PD lenders decides to sue me in court (although I have not heard of a case like that yet). Could my defense be that the lender did not have a license to lend money in my state and that the lender also violated the usary laws of my state?