Here's the letter I drafted to Cashnet500 today, based on pollyandsay's letter and modified to add Texas law and my info:
To Whom It May Concern:
As of April 21, 2006, I do not authorize Cashnet500, nor any representative, parent company, affiliate, or subsidiary of Cashnet500, to withdraw any funds electronically from my checking account ending in 7088 at Bank of America. The account has been closed to all further activity, so any attempts to debit this account will be denied.
After researching Texas lending law recently, I have discovered that Cashnet500 is not legally authorized to lend to residents in Texas. Your company is in violation of Texas usury, interest rate cap, and licensing requirements.
Your companyÃ¯Â¿Â½s claim that the contract I signed is solely governed by the law of the state in which your company is physically located is unsubstantiated. There is specific federal case law which trumps this claim. Your company consciously solicited, accepted, and transacted business with a citizen of the State of Texas. Therefore, you are subject to the laws of Texas Ã¯Â¿Â½ including usury, interest rate caps, and licensing requirements.
Your company repeatedly and purposefully chose to process Texas residentsÃ¯Â¿Â½ applications and assign them passwords. You cannot maintain that these contacts were Ã¯Â¿Â½coincidentalÃ¯Â¿Â½ within the meaning of the Supreme Court case World-Wide Volkswagen Corp. v Woodson, 444 US 297. When a company makes a conscious choice to conduct business with the resident of a particular state, it has clear notice that it is held to comply with the laws of forum state (Texas in this case). Therefore, if your company does not want to comply with the laws of Texas, you could have simply chosen not to do business with Texas residents.
Your company is in blatant violation of several regulations in the Texas Finance Code. Texas law clearly states that all lenders must be licensed in Texas in order to conduct business with Texas residents (Texas Finance Code 342.051). I have searched such records in Texas and have discovered that your company is not licensed to lend in Texas. Further, the Texas Office of the Attorney General has determined that such usurious contracts are not enforceable under TX law.
Your company is also in violation of TexasÃ¯Â¿Â½ interest rate caps on short-term loans. The interest permitted on cash advances under $2500 is $18 for each $100 loaned per year (Texas Finance Code 342.200). As an alternate interest charge provision, the Texas Office of Consumer Credit Commissioner has instituted a $10 upfront fee, plus $4 per $100 loaned per month on short-term loans (equal to 48% apr) (Texas Finance Code 342.252 (3)). Additionally, all such loans that rollover more than two times must be converted to a declining balance loan with a set repayment schedule.
In lieu of your companyÃ¯Â¿Â½s disregard for the laws of the State of Texas, I am immediately offering your company the opportunity to settle this matter with me amicably. Your company is not licensed to loan in Texas; therefore, any contract that I entered into with your company is unenforceable and automatically void as a matter of law.
Additionally, I have paid your company $300 in renewal fees, plus $150 toward the original $250 principal amount of my loan. The amount of interest you have charged me is well in excess of two times TexasÃ¯Â¿Â½ mandated interest rate cap for short-term loans. The remedy for such usurious conduct is refund of the principal amount on which such interest is charged, as well as all interest charged (Texas Finance Code 305.002). Therefore, it appears that your company may actually owe me a refund in regards to this matter.
In light of the information that I have laid out above, I am willing to settle this matter with you and not seek such refund as I am entitled to by law. I expect Cashnet500 to immediately mark my account PAID IN FULL. Further, at no time will Cashnet500, its representative, parent company, subsidiary, or affiliate, place any derogatory mark on my credit report with any credit bureau, nor with any check writing database such as Teletrack or equivalent database.
If Cashnet500 does not abide to the settlement conditions outlined above, I will have no choice but to file a complaint with the Texas Office of the Attorney General, the Attorney General of the state where you are physically located, and the Better Business Bureau.
Finally, all correspondence with me regarding this matter as of April 24, 2006 shall be in written form through e-mail or via United States Postal Service. Please acknowledge receipt of this letter and your acceptance of and willingness to adhere to the settlement described above Ã¯Â¿Â½ in writing Ã¯Â¿Â½ within 24 hours of receipt. If I do not hear from your company within this timeframe, I will take the action outlined above.
Think it might work? I know some have had luck w/GW and Quick Payday. I also have loans with them and plan to FAX the letters out after I get some feedback...Thanks!
By signing up a debt counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
Some creditors and collection agencies refuse to lower the payoff amount, interest rate, and fees owed by the consumer.
Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.