got a question...

If the collection company shows you validation of the debt, then yes. If you have a signed contract in front of you, along with the deposit information into your bank, then you will be required to pay the collection company.

Regards-
Mike

I'd say no. Get a list together of you internet lenders, with the amount paid in principal and the amount paid in interest.

well.. I did not ever think to ask a collection agency for debt validation. they don't include very much info in their letters. Thanks guys.

[quote=finsfan13]If an online lender is not liscensed to loan in your state, and they never seem to be, then you are not legally required to pay them back. Do I have this right?[/quote]

If you are not legally required to pay them back, most collection companies would not buy the accounts then. If the loan was not "legal" to begin with, then a collection company would not waste their time, just in the off chance that everyone knew the laws, and was "smart" enough not to pay for an illegal loan.

One thought...

If the loan was deposited into your account from a lendor that is not legally allowed to operate in your state, and you used those funds... then you are also partaking in an illegal activity.

That is what I figure. Each time I read a post about someone refusing to pay a lender back, I think to myself, "If they applied for and were approved for the loan, and USED the money, then aren't they required to pay them back regardless of licensing?" I mean, did any of us think to look up licensing BEFORE we took out the loans? I know I didn't. I was just so desperate to get the money, I don't think I gave that a moment's notice. So, I think we should simply put everything we owe with a consolidation company and get the loans WE TOOK OUT OURSELVES paid back civilly.

Now, it is a different story when you KNOW you didn't apply for a loan, but the company is illegally debiting your account. Then, you have just cause to fight those charges. As for the loans we all received with our knowledge, I think it's just time we suck it up and start paying for what we owe.

On a positive note, this forum has been so inspirational for me. Not only in helping relieve some of my stress but it has provided me with a tremendous amount of education that I may have not ever received otherwise.

So thanks to you all.

(1) If a debt collector "buys" the debt, they're still a "debt collector" as that term is defined by the fdcpa.

(2) debt collectors who "buy" debts acquire a large package all at once of many claims, and they make no attempt to evaluate every claim in the package. The purchase is really a discount procedure that reverses the normal order of commissions, like buying junk bonds, they pay pennies on the dollar for the total cost of the grab-bag of bad debt, and the amount of the discount relates not to the legality of the debt, but the collectibility of the debt - two different things, since many people will believe they really have to pay up and will pay up (or get on a treadmill whereby they pay too much on a weekly or monthly basis for the rest of their lives) because they think it's a moral issue not a legal issue, and they believe it when "the authorities" tell them they owe the money.

(3) The quick answer to your central question is an unqualified, "maybe". Whether or not you owe the money (in a legal sense) to an unlicensed lender depends on the laws of your state, and possibly of the United States. By virtue of their power to coin money, the U.S. controls the Federal Reserve Banking System and charters National Banks without any regard for state law. At the other end of the lending scale are the internet based payday loan companies that are regulated entirely by state law. There's lots of kinds of loans and lots of kinds of lenders and the laws on that subject are a crazy-quilt. Since you used the terms, "online" and "payday", I'm assuming that you're talking about an unlicensed payday loan made to you in a state that requires payday loan companies to be registered. A similar circumstance would obtain where the payday lender, whether licensed or not, charges fees and interest in excess of the limits imposed by your state law.

More discussion: "unlawful" is not the same as "illegal". An act is "illegal" if you can be prosecuted for a crime as a result of the act; an act is "unlawful" if it's not authorized by law. You need to know whether the loan company acted unlawfully or illegally (if the latter, then the contract is void and unenforceable). If it was merely unlawful, then you need to know whether the lender can still sue you, a matter of statute in the state where you live.

Anyone claiming under the lender's original claim has no better rights than the lender did. And if the original lender had no rights, there is no way that a debt collector can enforce the debt, whether they respond to a demand for validation or not.

My opinion of the usual way this kind of thing would work is that you could be legally obligated to repay the principal, since that doesn't require a license or involve the excess fees and interest issue. But you generally do not have to pay anything more than the original amount actually loaned to you, no interest, no fees, no commissions, no charges.

Maybe I worded my question wrong. I hope no one got the idea that I don't intend to pay my loan back, it's not like I took the money with the intent to scam them..My loans are all really small, I had actually been making payments on the principle of all of them before I defaulted. I am making regular payments and actually making headway now, I should be free and clear within 6 months ( I hope). I only have one at a collection agency, and I wondered about the extra fees and collection costs. I suppose my question was mainly out of curiosity, since I see that many people have had success with lenders who are not licensed. Thanks for the help!

I'm in the same boat. I never said that I'm not going to pay...but these people, SONIC/PRL/CASHTRANFERCENTERS and whatever else they call themselves, are unwilling to work with me. I asked if I could pay them in installments, and they said NO, so, I am actively trying to pay them.
So, it's not that I'm dodging my obligation to these people.

I feel the same way all. But most of these people have collected above and beyond the principal balances and it really is unfair that they are unwilling to work with you, especially after you have called them to make an honest effort.
They should have to abide by the laws of your state on interest rates, had I know there were laws like that I would have felt differently about obtaining these loans.

Y'all clearly feel a moral obligation to pay someone who, as a legal matter, is not entitled to be paid. And I don't want to get in the way of that - as John Travolta's character said in "Michael", "It's not my area."

But let's consider alternate moral issues. There's the "I think I owe a legitimate debt, so I ought to pay up." issue; then there's the "I should help criminals who are ripping off Americans through illegal payday loan scams in order to fund terrorism." issue.

If you're dealing with a licensed payday loan company that's charging interest and fees in accordance with the laws of the state you live in, then I applaud your sense of moral responsibility.

But, if you can't tell what the true name of the company you're dealing with is, and it appears that they're not located in the U.S., and they're not registered with your state government, and they're charging interest and fees in excess of what your state law says is permissible, and they don't have a mailing address, I respectfully suggest that you might want to reconsider your priorities.

ok, well, how do you find out what the laws are in your state, and if you applied for and recieved an online payday loan from a company not licensed in your state (mine, TX) then how do you fight it? How do you you legitimately prove that they are "unlawful" and go about not re-paying the outrageous fees?

Quote:

Quote:

Hey everybody..please read my posts regarding my calls to the Fl.Board of prof regulation and financial department.
I think I'm getting somewhere with this....

pollyandsay,

does that mean that the loan company can only charge me $18 per $100 (loans<$300) or else it is considered unlawful?

Yes, that is a correct assertion, as long as there is not a check involved.

ok, what if I faxed them a copy of a voided check for them to validate my checking account info? Does that count as a check, or do you mean, those PDL co's that are storefront and ask for a check to hold till your next payday?

The voided check you faxed is not applicable to this law. The store front lenders who hold paper checks are governed by the Deferred Presentment. The internet lenders are held to a different set of rules.

This is nuts..If I figure the interest that I have paid on the 4 loans that I have left I have paid more than the principle..2 of them I have had since July, and stayed current until February. Oh wow....I've paid the principle over more than once.

ok, do you have any info. about where I can go to look up info. on my state as well?

I've done this several times, and it's worked for every state I've tried so far. So, here's the procedure I use for getting the information I think is relevant:

1) Verify the company name and location;
a) get that off of whatever documentation you got when you got the loan, check their website, etc. (note, especially, whether they give a true name, like, containing words like Co., Inc., LTD., LLC, or some such, and a street or mailing address in their FAQ, "about us" or "contact us" pages).
b) search the internet w/search engine to locate all references to the company names you know about, some of those pages will give you others, as well as the registered domain names the company's using for its website(s).
c) "whois" those domain names to get the registration information, esp. name of the owner of the domain name as well as the location.

2) Find the laws of your state: use Findlaw or Alllaw (.com) to look up the state statutes: they may use words like, "payday", "deferred presentment", "small loan", "consumer loan", or "consumer finance". That'll tell you what the rules are for licensure as well as maximum fees and interest, as well as the name of the state office responsible for regulating the industry.

3) Use a search engine to find the office that regulates corporate entities in your state; it's like, "secretary of state", "commissioner of corporations", or some such. They almost always have a database you can use to look up the names of corporate entities to see whether they exist, at least. Virginia does it best, in my opinion, because everything you could find out by calling the Clerk of the State Corporation Commission is available for free online. Look up all of the names you were able to find for the company (use the 'starting with' search feature if you can). If you discover there is no such name in your state's corporation database, then that company does not exist as far as your state is concerned.

4) Do the same thing with the state that the company is located in, if they're located in the U.S., and see whether they're legal there. (Caution: Heathmill and probably others, may be unlawfully using the correct names of other companies in order to dodge civil suits, particularly in Nevada.)

5) Find the official in your state responsible for regulating the industry, Commissioner of Banking or whatever. They almost always have a way you can check a licensee database. Virginia requires you to download the current list in pdf format, most states have an online database lookup thing. Check that list for all the names the company is using. If they're not on that list, they're not licensed.

If they don't have a legitimate corporate existence, no valid company name, no mailing address, no license, then they're bogus. The bogus ones will send you a small amount of money (like, fifteen hundred dollars or less) in exchange for all sorts of personal information about you, and blanket authorization to bill against your bank account. Then they'll start to do unauthorized debits from that account, and when you close it, they'll call saying your mother will be arrested and thrown in jail for internet fraud if you don't pay up. That's a bit of hyperbole, but I bet there's lots of folks on this website who will tell you it's close to the truth.

btw, a voided check is not a check. A check is a negotiable instrument. If it's not negotiable, it's not, by definition, a check. It may be the form of a check, but without a payee, a signature, a date certain, the phrase, "pay to the order of:", and a determinable amount of money to be paid, it's not a check. Just a piece of paper with your bank account name and number on it.

I have to admit I have fought this moral issue myself, some loans I have paid off, others have settled with me, others have written off my balances. Okay, here's my beef with these companies, and it's not only because they are not licensed in my state. I had no idea about this when I took out the loan, I just knew I needed the money. The three lenders I have left, I have paid ten times over. Why should I keep paying someone who I considered paid in full? I have legitimate bills to pay such as mortgage, car payments, utility bills. Why should I keep wasting my hard earned money on a company who is not following the laws of my state and has been paid much more than the orignal loan amount? Enough is enough :?

Virginia Legal,

I have one for you. One of my payday lenders is licensed in Delaware and not Ohio, my state. We have been battling back and forth whether it is an actual ACH withdrawal or a check. I don't have my original loan documents anymore. I was a customer of this company for nearly three years before I entered into debt consolidation. I have asked for my documents or account history, of course I've been ignored in all my attempts. I never personally signed a check but maybe a piece of paper stating it was okay to do this. Would this still be considered a check? A check number was always given on a withdrawal, a check number they assigned. Or is this their way of avoiding laws? I have no idea :(

I guess I feel bad because, by entering into the agreement that I would 1)receive the loan, 2)pay it back with the agreed upon (crazy high) interest, 3)pay any late fees, 4)have the ability to re-finance (which I did many times). I feel that because I agreed to all that, that I should pay them back. I know they're evil and all that, but I made that deal with the devil, and now I'm paying for it. That's just life, isn't it?

Also, one of the bad check notices they sent me, they said I had a write to dispute it, I did via certified mail twice, with no reply. Also, they kept hitting my closed account to add additional fees.

No, it isn't life. My gosh some of you folks take a conscious to an all new level...

Do you realize that many of these shady companies are funding the next 9/11? That's right, the next horrific event in our country, I have probably helped fund by giving these mo fo's too much of my hard earned money.

Yes I was stupid then, but now I am informed and so are you.

how did you know they were hitting your account if it was closed? I mean, was it just frozen, or completely closed out? This scares me...

Seeingthelight,

I totally understand your position. I've added the money up that I've wasted with these companies over the years and it makes me sick to my stomach. Yes, I signed the loan agreements but I had to get out of the cycle. I found this forum and entered into debt consolidation a few months ago. Then, comes the harassment, idle threats, etc etc from these companies that are breaking the laws in my states and others. I feel we need to shut these companies down because it is nothing but predatory lending. I've paid them enough in finance and roll over fees. There will come a day when you will get sick and tired and things will change for you. Just my opinion.

i'm already sick...and i too signed on with T&C last week. I do feel that I have rights, but I guess I'm just not as brave as all of you guys to threaten legal action and such. I would just rather pay them all off and be done with it. I know it's not that simple because they will still call, harrass, etc. But it does make me feel better knowing that I have taken a step in the right direction. And I'm truly greatful for everyone's great advice. Oh, and Avenger, how do you know they are debiting your closed account? I asked before, but you may not have seen that post if you were posting at the same time...

No, I closed my account when I joined with T &C. The company sent me notices through the beginning of March, it has almost tripled my balance. I filed a complaint withe attorney general's office in their state. My next complaint is to their state's bank commissioner's office. You will be amazed at what these lenders try to do :x

SEL,

I felt the same exact way when I first joined T &C. Things changed when I got that first phone call and told I had no rights. I decided to fight back so don't be afraid to stand up for yourself :)

thanks, I wish I could stand up for myself. I just don't have the time. I mean, right now, I'm doing homework, entering data from home for my job, and trying to communicate through this site all at once...I think suing all these lenders would be more effort than I can spare right now.

Payday Loan Avenger:

Before you take any action, consider what it'll mean for you in terms of consequences. Have you looked at your credit report lately? There is something to be said for shelling out the cash to protect an asset you've already got. But if you have looked at your credit report, and your credit is already in the toilet, what's the worst that could happen if you told the Delaware company to take a flying leap?

My guess is that they can't sue you in Ohio. I haven't looked up the statutes and I don't know what company is involved, but there's two issues: whether they're registered in Ohio as a foreign corporate entity, and whether they're licensed to do payday loans. I already looked up Ohio law on payday loan companies for someone else, so I'm pretty sure that if they were to sue you in Ohio, you could file a counterclaim that would make their heads spin. Not only could they not get a judgment against you, you'd wind up with a judgment against them. But I don't think they'd even be able to file; I know they couldn't in Virginia.

But assuming the worst, lets say your credit is shot and they get a judgment against you. All that says is that you owe a particular amount of money, and it ends any dispute about how much. As I recall, as I don't have the Fair Credit Reporting Act memorized, a judgment will stay on the credit report longer than the assertion of a bad debt. And it theoretically gives a basis for judicial enforcement of the debt, like garnishment, seizure of assets, etc. A judgment isn't money, it's like a shopping bag; it's up to the plaintiff to fill it up.

If it were me, I'd file suit against them. Where you live. They owe you for all the interest they've charged that was in excess of the statutory limit. They owe you for stealing money out of your bank account that they had no lawful right to take. I'd spend half an hour with a consumer protection lawyer in your area if I were you.

Oh, and btw, a check is a draft drawn on a bank. A negotiable instrument. Something that can pass in commerce. It doesn't have to be on paper, there are famous cases of checks having been written on the side of a cow and on a pair of ladies' undergarment. But there are formal requirements that have to be met in written form. There is a provision in the relatively new check processing rules that allows the electronic processing of a check without the return thereof by a merchant or the merchant's bank, but that still requires that someone write a check. Otherwise, it's just an authorization for an electronic funds transfer. "Wiring money." If you give authorization for an EFT and close the account, it's a breach of contract, not a bad check.

Payday Loan Avenger:

Before you take any action, consider what it'll mean for you in terms of consequences. Have you looked at your credit report lately? There is something to be said for shelling out the cash to protect an asset you've already got. But if you have looked at your credit report, and your credit is already in the toilet, what's the worst that could happen if you told the Delaware company to take a flying leap?

My guess is that they can't sue you in Ohio. I haven't looked up the statutes and I don't know what company is involved, but there's two issues: whether they're registered in Ohio as a foreign corporate entity, and whether they're licensed to do payday loans. I already looked up Ohio law on payday loan companies for someone else, so I'm pretty sure that if they were to sue you in Ohio, you could file a counterclaim that would make their heads spin. Not only could they not get a judgment against you, you'd wind up with a judgment against them. But I don't think they'd even be able to file; I know they couldn't in Virginia.

But assuming the worst, lets say your credit is shot and they get a judgment against you. All that says is that you owe a particular amount of money, and it ends any dispute about how much. As I recall, as I don't have the Fair Credit Reporting Act memorized, a judgment will stay on the credit report longer than the assertion of a bad debt. And it theoretically gives a basis for judicial enforcement of the debt, like garnishment, seizure of assets, etc. A judgment isn't money, it's like a shopping bag; it's up to the plaintiff to fill it up.

If it were me, I'd file suit against them. Where you live. They owe you for all the interest they've charged that was in excess of the statutory limit. They owe you for stealing money out of your bank account that they had no lawful right to take. I'd spend half an hour with a consumer protection lawyer in your area if I were you.

Oh, and btw, a check is a draft drawn on a bank. A negotiable instrument. Something that can pass in commerce. It doesn't have to be on paper, there are famous cases of checks having been written on the side of a cow and on a pair of ladies' undergarment. But there are formal requirements that have to be met in written form. There is a provision in the relatively new check processing rules that allows the electronic processing of a check without the return thereof by a merchant or the merchant's bank, but that still requires that someone write a check. Otherwise, it's just an authorization for an electronic funds transfer. "Wiring money." If you give authorization for an EFT and close the account, it's a breach of contract, not a bad check for purposes of criminal prosecution.

So an EFT is the same as ACH then? I don't think it will be hard to prove because I have all the records from my old bank, including a letter they sent to them stating my account was closed. I got those copies this week, which I included in my complaint to the attorney general's office in Delaware. Ohio has very similar laws to Virginia. They must be licensed in order to loan money. How can I find out if they are a foreign entity or corporation? I know they are not licensed in my state but the lender considers the transaction done in their state. If they decided to sue me, wouldn't they have to sue me in the county of my residence or do I understand this wrong?

Virginia Legal Defense,

I have a copy of the Ohio Check Cashing Act and the payday loans in my state. There is a clause about taking legal action about deceptive practices or something like that. If you pm me your fax number, I can fax this stuff to you. This is Mishele btw :-)

This is the URL for the Ohio Secretary of State corporate database page; change punctuation from words and delete spaces:

http colon slash slash serform2 dot sos dot state dot oh dot us slash servlet slash page?_pageid=56,62&_dad=porthope&_schema=PORTHOPE

Btw, Avenger, don't bother to fax me that stuff, it's easier for me to look it up online.

One thing I failed to point out, in my many diatribes and pontifications on the subject of filing suit, is that filing suit is not mutually exclusive with working with a consolidation plan or counselor. They ought to be kept informed about what you're doing, of course, but you can work your plan and file suit, too. It's just that when you file, you have to set your claim for damages high enough to recover a judgment for the full amount you'll end up having paid, not the amount you've paid as of the date you filed suit. You can always get a judgment for less than you asked for in your pleadings, but not more (that would be a violation of the defendant's right to due process since they didn't get adequate notice of the additional claims). Your estimate of damages should be a good-faith figure based on what you'll be owed as of the day of trial, supported by reasonable evidence. You can only get in trouble for mis-stating the claim for damages if it's way off and you had no good reason for thinking that it was going to be a valid number as of the day of trial.

Thanks for all your help :-) I have stopped doing the debt consolidation with these companies as of this week. I have three lenders left and in the process of filing complaints against them. Was that a bad move?

There's risks and benefits to everything, and the trick is in balancing the probable payoff v. the risk, in a manner consistent with your relative degree of risk-aversion.

I'm not very risk-averse, myself, so I like to take chances, so by my lights, yes, I think you're doing the right thing. Others may differ. But you and I have looked over Ohio law on the subject, reviewed the licensing statutes in particular, determined that there were no licensees by those names, so I'd say you're on solid ground. Finding out who's behind the names, really, as in, figuring out whom to sue, that may be another can of worms. If you don't get the names right up front, you can't collect later. You can probably do "person or persons unknown, dba 'payday loan company name" and "other name" and etc.", and use subpoenas to figure out who they are and move to change the names as appropriate during the course of the suit.

I've become more of a risk taker during this process. Yes, Ohio law is very specific when it comes to payday lenders. I'm grateful for that. I have found another violation from this lender in particular. They are licensed in their state but there is a possibility of a state violation in their own state of Delaware. I have filed a complaint with the attorney general's office in Delaware. I am sending a complaint to Delaware's bank commissioners office this week as well. I will also file the appropriate complaints in Ohio. I have looked under their current name as well as their dba in Ohio and nothing.

The other two lenders may be a little bit more tricky in finding out their legitimate names, well one maybe not so much. I have my original paperwork from these companies since I was able to print it off the internet last week. I know that this will take time but I'm willing to see it through.

Keep going Mishelle...I have been working with my pdl's and also with my Atty General's office and Prof. Regulation. They've even offered to write letters to them for me.
You might get somewhere then, don't let up. As long as you stay in contact with these fools, they may get sick of you and void your contracts altogether.
I even had an idea to fax them several times a day Fl. Statutes just to be annoying...LOL

Hello erzeke1,
Can you please give us the link to where these posts are (in regards to the calls to the Fl. Board of prof regulation and financial department)? I would love to take a look...

Just go over to the Pub forum and announcements. There's my post for Florida Attorney General's office reply I recieved.
I would have posted the link here, but not sure how to do that!

Try this one too...(hope it works)

http://www.debtconsolidationcare.com/forums/florida-consumers.html