New and fell into the PDL trap!

Have you contacted the state yet? If not I would ASAP because if this is a storefront lender then they have to be licensed. I would file a complaint with the AG and DFI. Plus if you were paying them down and they cashed your check for the original amount, that is not right. I haven't heard of a storefront doing business like that. But also check out the collection agency that has your account and see if they have any complaints against them. The more info you have on these places the better off you are. This way they don't scare you into paying.

I am sure that someone else will be along that knows more about the CSO. So hang tight and keep checking back.

golden....Goudah knows all about the CSO thing...try to PM her and ask her to look at your post...she could explain it to you....she is one of our experts!!

Well, since reading about this CSO stuff I'm not sure they need to be licensed, since they are trying to say they are a CSO..its just that they don't -act- like anything other then a payday lender.

They did not 'cash' the original check, they just hit up my bank for $453 (in the collection letter it states this is principle, interest, CSO Fee and NSF fee.) But I am almost positive that the contract stated just a 'finance charge' nothing about a CSO fee.

The collection is in-house, it is still EZmoney, just thier collections dept.

They don't scare me, Im so annoyed im tempted to take them to small claims court, jury trail and plead my case that they were deceptive and are using this loophole to deny me my rights under texas law.

CSO's don't have to be licenesed, only registered with the Secretary of State. It's a virtually unregulated industry.

All the storefronts in Texas use the CSO model for payday lending. It is legal, unfortuantly. All they have to do is help you get a loan, and they can claim they are a CSO. Sucks, huh?

Federal courts have found that fees charged by a CSO cannot be considered interest, so when a pdl acts as a CSO they can get around many state's ursury laws. That is why they do it. It's a relatively new thing.

If you went to court over it, you probably would lose. What they are doing is totally legal. By law they are allowed to service the loan, which is why you thought the loan was with them.

Do you have the contract? If not, you need to get a copy. It would have to say in the contract that they are not the lender, that they are a Credit Service Organization, and that they will be the ones servicing the loan on behalf of the real lender.

I think your only way "out" of this would be if the contract didn't say anything about being a CSO. I'm going to try to find the Texas laws on exactly what the CSO must do, and I will post them here for you.

So you can go in and they must show you their registration certificate. Not that it is hard to get, you just pay the fee and give:



Sounds real hard to become a CSO in Texas!

Wow! What a headache. They may be legal, but until I get a copy of the contract I won't know for sure but so far, from looking at the law for CSOs I know they are in violation of one, possibly two:


-- they did no such thing, at all! As I said before, I had no idea they were a CSO..I never even heard of it until I got the collection letter. Even thier little brochure at the desk doesn't make any mention of them as a place to help you with credit! They do offer an 'option' that they will report your good payments, but they never did any such thing with the first loan and that was completely paid off in good standing, so they even lied about that!

The other section they may be in violation in:


-- They were totally deceptive about the whole thing, they never disclosed -anything- to me, at all.

Is it possible the disclosure statement was in the contract? That is all they would have to do, they wouldn't have to actually say anything to you about it.

Hmm yeah, but that first law I quoted, states that this information must be made available BEFORE a contract is executed, so if they just put it into a contract without first disclosing to me, isn't that a violation?

I don't know that you could claim fruadulant or deceptive practices. If it says CSO anywhere in the contract then they weren't deceptive. It may seem that way to you, but legally that isn't considered a deceptive practice because it is clearly stated in the contract.

I think you need to get a copy of that contract before you do anything else. That will give you the answers on what they did right or wrong. Most places will give you all the paperwork together, so the disclosure could very well be there.

Not necesarily. The contract is not executed until the loan is "funded".

Too bad there isn't any stipulation about a CSO having to display they are licensed as a CSO, or a law against a CSO in Texas working with a lender who is NOT licensed in texas (the NCP leander is not licensed in texas).

Yeah, the whole idea of payday lenders operating under the CSO model sucks. It's a wonderful way for them to avoid any payday loan legislation, and operate in a virtually unregulated field.

I agree..I will just have to wait for the contract. I sent a letter to them asking for it, which I am entitled to under texas law, I also included a limited cease & desist to no phone calls..if I can't get them on the loan/cso stuff, maybe they will violate under the debt collection laws :twisted:

Just so you know, the fdcpa doesn't apply to the original creditor, only third party collectors. Which in this situation is a bit unclear, because most would consider a CSO a third party, since they are not the lender, but they have a contract with the lender to service the loan, so that makes them the original creditor. Messed up. But state collection laws would still apply.

Yeah, tricky with the fdcpa, I am mostly going on texas law itself.

And that they have to follow!

Wow I didn't know about something like this :shock: That sucks.
I am glad that you know all about this Goudah.

I'm just hoping that pdl's in other states don't start doing the CSO thing. It's a totally legal way for them to skirt the pdl laws. Federal courts have already decided that fees charged by a CSO cannot be held as interest, so they can legally skirt any ursury laws a state may have in place. Total BS.

Ok hmm....thinking and rethinking it...so..EZMoney is a CSO. Nothing I can do about that fact. However, the contract they have with NCP Finance Limited Partnership lists them as the 'lender' so in effect NCP gave me the loan...which means that NCO must abide by Texas loan law yes?

If this is the case then fine..I will go after them. They are not licensed in Texas to do loans. Maybe if someone takes THEM to task, they will put pressure on EZmoney.

Gah..the above post was mine:)

No, since they are operating through a CSO the lender does not have to be licensed in Texas.

Hmm well dang it. This is so wrong. They pretty much just gave the dang gangsters back their loan sharking practice with full blessing.

So..just anyone can decide to register as a CSO and partner up with some scumbag unlicensed lender and can do whatever they want??? I'm surprised there is not a cement shoe clause for those who don't pay. :x :x :evil:

Gah..that was me..again. I gotta remember to log in :oops:

Yeah, CSO's are a virtually unregulated industry. They can do what they want. The state governments haven't caught up to them yet . . . .

It's sick and wrong on so many levels. These loan sharks are covering themselves under the umbrella of "helping you build your credit" when in reality they are destroying it!

Helping me build my credit??? They never did any such thing! On my first loan it was paid on time every time until completely paid off...they never reported to any of the CRA's. They don't even advertise as a place to build credit, but as a place to simply loan money.
This whole thing just chaps my hide. I'm going through every dang law and code and look for any little thing I can use against these guys.

nevermind...deleted question..Im just so angry Im flying blind:):):)

I would be too! These places are terrible. But yeah, the whole idea behind a REAL CSO is that they help consumers with bad credit get loans so that they can help build up good credit.

If you find something good to use against them, please post it here. If more of these pdl's start going over to the CSO model there are going to be lot of people that will fall into their trap.

I don't know if I am totally missing something, but in looking over the laws I could not find anything that actually said that any lender using a cso did not have to be licensed. From what I read even if the CSO is issuing a letter of credit to the lender, that lender is still in effect loaning me money and therefore are subject to the lending laws of this state.

I'm still waiting for them to send me a copy of the contract; I really hope to find something in there. I wish there was some way to challenge these payday lenders who are using the CSO model to get around the law. So far I still think I have them on deceptive trade practice, they may be licensed as a CSO but they offer absolutely no credit help, just loan money. I am still wondering if I could argue that in small claims court...this CSO really isn't a CSO as they do not do -anything- that a CSO does. Heck, their signage even says ???????payday loan???????? not ???????credit services???????? or ???????credit help???????? or anything.

I wish someone would do that. PDL's using the CSo model makes me sick. CSO's are supposed to help people improve their finances, and pdl's just ruin them!

What I've read said that the lender didn't have to be licensed, but that wasn't in the law. On one hand it makes sense that the lender would have to be licnesed, but on the other hand it also makes sense to me why they wouldn't. I'm going to look into this some more too. If you find anything out please post it, and I'll do the same. I know that CSO's can charge what they want in fees, and that the fees cannot be considered interest, but the licenesing issue of the actual lender I'm not 100% on.

But this CSO crap needs to stop. Texas is the state with the most of them. Pretty much all the storefronts in Texas are actually CSO's . . . .