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Dealing With Unlicensed Payday Lenders

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Updated on July 14, 2010: At the bottom of this post is a newer version of a letter template which you may or may not want to use, make sure you use your own words, this is only a sample.

If everyone will just give a link to this thread to the new members who come here for guidance it may be more helpful and less work for the experienced members who are researching information. I wrote this awhile back and am most happy to share it. THANKS!

You are only obligated to pay back the principal amount you borrowed from an unlicensed/illegal Internet Payday Lender.

What should you do?

Close your account asap, if you are unable to close your account, go into your bank and ask to speak with the Branch Manager, tell him/her you need a hard debit block placed on your account immediately! Explain that you are revoking ACH authorizations from unlicensed/illegal companies, and have learned these companies are notorious for ignoring revocation, therefore it is important to BLOCK any withdrawal attempts on your account to protect your interest. This is your privilege, do not accept no for an answer. The following link will provide you important information regarding closing accounts. CLICK HERE
What next?
AFTER your account is secure send each pdl (the unlicensed and illegal) an email similar to THIS (please scroll down to locate letter template). Tailor this letter to your needs, and try to write it with the same basic concept in your own words. You will need to research and locate email addresses/physical addresses if you don't already have them, I suggest that you type the name of the pdl (example: "oneclickcash address") in the search box in the upper right hand corner of this forum. You may also search for addresses HERE at the Better Business Bureau.
File complaints: Most of the time, you can file a complaint online with the following, I encourage you to follow through with doing so, you will need to search the Internet for your state Attorney General's website, however, here are links to file complaints for the FTC, Online complaints: Federal Trade Commission., and the BETTER BUSINESS BUREAU.
Keep in mind that you may not receive a response for days, or even weeks, or, you may receive harassing and threatening phone calls. I have found the best way to deal with this is not to respond or reply, simply hang up.
Side note: If you have paid an illegal/unlicensed payday lender above and beyond the principal amount you borrowed, it might be a good idea to demand a refund and a paid in full letter/receipt. You may or may not get one or both. It still doesn't hurt to include that tidbit in your letter. :)

Name Of PDL

Your Name
City, State
Account #

This letter is to inform you that I am aware of the FACT that the loan you issued to me, is NOT legal or binding in my state. For your convenience, I have included my state payday loan laws below.

(Insert Your State payday loan laws here)

(Insert either (a) OR (b) which ever statements below which applies to you)

(a) The state of (insert your state) prohibits payday loans, therefore, I am bound by the state laws where I reside. As I have no presence in your state or country (only insert one choice, state or country, depending on your situation.), therefore I have no legal obligation to the 'governing laws' you may have detailed.
(b) The state of (insert your state) requires Internet payday lenders to be licensed in MY state. I have already researched this information, your company does NOT have a license to lend in the state of ___________, if I am mistaken I will need proof in the form of a license number so that I may verify it with my Attorney General. I am bound by the state laws where I reside. As I have no presence in your state or country (only insert one choice, state or country, depending on your situation.), therefore I have no legal obligation to the 'governing laws' you may have detailed.

Be advised that as of today (insert todays date) I am revoking ANY and ALL ACH authorizations with your company from debiting any AND all of my personal accounts, per Federal law, Regulation E Section 205.10 Preauthorized transfers. I also revoke ANY and ALL wage assignments I may have signed, by you, including but not limited to; any of your affiliates, dba's, and collection agencies assigned to this account. None of the above no longer have my permission to access my accounts or impose a wage assignment.

I will only communicate to resolve this matter via email. If you ignore this notice and attempt to contact me or any of my references via telephone, you will be ignored and any payments owed will be delayed. I am willing to pay the principle amount of the loan only, however, no address means NO payments, this is not negotiable.

If you do NOT reply to this notice within 48 hours I will be forced to file complaints with my Attorney General (insert name of your attorney general), the BBB and the Federal Trade Commission. If you reply to this notice with any misleading legal implications or menacing course of actions you are unable to follow through with, I will be forced to take actions against you which could cause you to lose your license in the state of (insert the state they are licensed in) < (only use this statement if the illegal lender is licensed to lend in a state other than yours) and cause damage to your reputation, which could potentially decrease your clientele!


Your Name[/QUOTE]

Thanks Shazzers I was looking for this :D

Sub: #1 posted on Thu, 02/05/2009 - 02:17

nohiogal nohiogal

(Posts: 2582 | Credits: )

Hoe do you know if a payday loan illegal or not

Sub: #2 posted on Thu, 02/05/2009 - 14:51


I live in MA. How do I determine if they are illegal payday lender or not. I have only paid the fees each pay period on each loan (no principle) however the total fees i have paid are greater than the original loan already. These are the current PDL companies I am paying:

500fast cash
United Cash Loans
Mesa Financial
DJR Group
Arrowhead Investment
East Side Lenders

PS - This afternoon after reading some of this I sent an e-mail to Upfront Pay day only saying that I would file a complaint with MA. With in ten minutes zeroed my account!

Sub: #3 posted on Thu, 02/05/2009 - 16:03

mjhayes75 mjhayes75

(Posts: 6 | Credits: )

CLICK HERE for the MA payday loan laws. ALL Internet lenders are illegal in the state of MA. Please get your account closed BEFORE you send out ANY letters. Go to your bank and fill out a formal dispute on these illegal debits, tell them you want your funds back asap! Also explain to your bank manager all of these lenders are illegal, print out a copy of the payday loan laws and take it to your bank manager. You would be better off closing that account, now that these lenders have your account number they will debit your account to death! :shock:

Sub: #4 posted on Thu, 02/05/2009 - 16:51

Shazzers Shazzers
Moderators Cum Industry Expert
(Posts: 17344 | Credits: )

when you click the actual link to the MA site it states that they can not help you when you do business with unlicensed lenders! Also, my checking account is with ING there is no bank manager to speak with!

Sub: #5 posted on Thu, 02/05/2009 - 17:07

mjhayes75 mjhayes75

(Posts: 6 | Credits: )

File complaints with the FTC, BBB and your Attorney General's office anyway, these lenders should NOT be offering loans to MA residents when it is prohibited.

Sub: #6 posted on Thu, 02/05/2009 - 18:51

Shazzers Shazzers
Moderators Cum Industry Expert
(Posts: 17344 | Credits: )

Excellent work done Shazz. You're the best. :D

Sub: #7 posted on Fri, 02/06/2009 - 02:50

Jason Jason

(Posts: 2431 | Credits: )

Legal / illegal payday lender not sure:
I live in CT and I'm not sure if all of my payday loans are illegal/unlicensed loans. I saw a post that stated I can e-mail the ACH revocation letter but I do not have contact information for each of my lenders? If anyone can help with this information I would appreciate it. I am hoping to close my account and send these letters before I get paid Friday. Hopefully I can finally see some of my pay. I have not seen any money yet this year and my bills are beyond suffering. My loans are as follows:

I have the following loans currently:
7/10/09 500fastcash borrowed $300 paid back $975 (in full)
10/10/08 Centurion/loanpoint USA (I think) borrowed $500 thus far have paid back $1200 (and they continue to debit $150 each paycheck)
10/17/08 CityviewCash borrowed $300 thus far have paid back $635
10/30/08 Webpayday borrowed $500 thus far paid back $1080
11/3 CMG borrowed $300 thus far have paid back $660
11/5/08 PaydayLoanYes borrowed $350, on 11/21 payday they debited $175, $175, and $30 total $380 (have no clue what that was about but was quite hostile when I called and of course there is nothing they can do)
11/25/08 First West coast/Atlas money online (I think) borrowed $350 thus far have paid back $420
11/25/08 MTE Financial borrowed $300 thus far paid back $450
11/26/08 Ameriloan borrowed $300 thus far have paid back $390
12/3/08 Avantis Financial borrowed $300 thus far have paid back $442.80 (the way they figure out the finance charge is quite odd and come out with change ?!?)
12/13/08 Sagemore borrowed $300 thus far have paid back $300 and counting(what do ya know!)
12/15/08 500Fastcash (yes another one. the first one was overly paid in full) borrowed $350 thus far have paid back $315

Thank you everyone. I can finally begin to see there is a light at the end of the tunnel......

Holding on :)

Sub: #8 posted on Mon, 02/09/2009 - 06:22

mzbeonita1 mzbeonita1

(Posts: 9 | Credits: )

go to the links that shazzers has with MA pdl's are
prohibited in CT.follow the links she has set up and you will have the tools you need to get these people out of your life once and for all.

Sub: #9 posted on Mon, 02/09/2009 - 06:26

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15514 | Credits: )

Hi, I am really wondering how FL law deals with multiple online payday loans. I have several online payday loans - but the state of FL says you are only allowed to have one. Does that mean that these lenders are illegal?

Sub: #10 posted on Sat, 02/14/2009 - 21:49


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