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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 company�s 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 � including usury, interest rate caps, and licensing requirements.

Your company repeatedly and purposefully chose to process Texas residents� applications and assign them passwords. You cannot maintain that these contacts were �coincidental� 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 Texas� 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 company�s 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 Texas� 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 � in writing � 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!

Perfect, you might see this letter giving you out positive results. Let's wait to hear back from them in a professional way.

Sub: #1 posted on Mon, 04/24/2006 - 13:43

david david

(Posts: 1231 | Credits: )

Hi wswofford

You can also send copies of bank statement to prove that you have paid the additional amount. This will force them to do the calculations and refund you the excess amount.

Please let us know the response from the company.

Sub: #2 posted on Mon, 04/24/2006 - 13:45

john john

(Posts: 1234 | Credits: )

I wonder if all these companies are getting tired of that basic letter. I think there are several of us that are using the same basic letter adapted for our state laws. It has worked for me with 2 companies. Good luck!!

Sub: #3 posted on Mon, 04/24/2006 - 13:48

CycloneFan CycloneFan

(Posts: 1156 | Credits: )

sue, which 2 has it worked for? That letter sounds amazing if it works...

Sub: #4 posted on Mon, 04/24/2006 - 14:12

Seeing_the_Light Seeing_the_Light

(Posts: 530 | Credits: )

The letter has brought me good luck also. I just reword with my states laws and so forth. Where all the companies seem to be connected, I think that is why the letters are working. They know we mean business and that they don't wan to be exposed. Whats your opinion?

Sub: #5 posted on Mon, 04/24/2006 - 14:15

Not so Lucky Not so Lucky

(Posts: 3042 | Credits: )

I should definitely try this...

I sent out a similar letter a couple of weeks ago, asking for my account balance to be sent to me via mail within 10 days...and have yet to receive anything!

Sub: #6 posted on Mon, 04/24/2006 - 14:19

Seeing_the_Light Seeing_the_Light

(Posts: 530 | Credits: )

The letter is very well written and is very specific. I would go so far as to actually request a refund of the finance charges, or a difference between what you paid and what you would have paid in Texas. If they balk, you can always settle for marked paid in full, but why not try for some actual redress,

Either, way it is a great letter

Sub: #7 posted on Mon, 04/24/2006 - 15:25

jj jj
(Posts: 1057 | Credits: )


That is a very well written letter. When stating why you took such action, you went into great detail, and even explained a few laws. Perhaps there might be someone else from Texas, that might run into your letter, and could use it to their advantage as well.


Sub: #8 posted on Mon, 04/24/2006 - 15:42

Teleport Teleport

(Posts: 1388 | Credits: )

Yeah...well...I'm a licensed attorney in Texas, so I'm pretty good at writing legal research-type stuff :)!! I got into the PDL bind when I graduated and couldn't find a permanent, full-time job right away. I make good money now, but half my paycheck was going toward paying fees etc. on the PDLs.

I am fortunate that I can still afford to pay the bills and the refi charges, but it was getting to be a drag and seemed like it would never end. Never even thought of getting them to mark me PAID IN FULL.

Sent three letters today via FAX/e-mail to Cashnet500, GW Financial, and Payday Two (affiliated w/Cashnet). We'll see how they respond. I did ask for a fair refund of the excess interest I have paid, but won't count on it. I'm hoping that their compromise will be to mark me PAID IN FULL and be put on a NO LOAN status.

Wish me luck!

Sub: #9 posted on Tue, 04/25/2006 - 10:07

wswofford wswofford

(Posts: 18 | Credits: )

I've used your letter...hope you don't mind...let's keep each other posted about who it works for!

I sent it to Cashnet500 and GW financial as well!

good luck

Sub: #10 posted on Tue, 04/25/2006 - 10:10

Seeing_the_Light Seeing_the_Light

(Posts: 530 | Credits: )

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