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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]

we do advocate paying back what was borrowed.if anything was debited that they call fees.take that off the amount owed.

Sub: #91 posted on Thu, 08/20/2009 - 12:39

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15512 | Credits: )

Even if they are illegal?

Sub: #92 posted on Fri, 08/21/2009 - 10:20

mjohns54 mjohns54

(Posts: 26 | Credits: )

Just because they are unethical does not give *you* a right to be unethical.

Sub: #93 posted on Sun, 08/23/2009 - 21:10

Chrys Henderson Chrys Henderson

(Posts: 2538 | Credits: )

Are internet pdl's illegal in Nevada? I have loans with:
Star Cash Processing
CashNet Usa

I am in the same boat as everyone else. Got in too deep and cant get above water.


Sub: #94 posted on Mon, 08/24/2009 - 03:43


I wasn't trying to sound as though I am unethical. If I came off that way, I apologize. My only issue is whether I have already paid back so much in the way of fees over the months should I still pay back the balance due? The answers I am seeing are basically that once the ORIGINAL Principal is paid I am done. Am I reading that right?

Sub: #95 posted on Mon, 08/24/2009 - 09:58

mjohns54 mjohns54

(Posts: 26 | Credits: )

mjohns54, you only need to pay back what you originally borrowed, deduct any over payments, fees, interest you already paid, it may work out that they owe you a refund, and probably will. :D

Sub: #96 posted on Mon, 08/24/2009 - 10:03

Shazzers Shazzers
Moderators Cum Industry Expert
(Posts: 17345 | Credits: )

The problem I am running into is that most of the sites, while having a Loan History link, only show the history of the last payment. The other issue is that the sites that actually DO post your ACTUAL payment history show each payment as a new loan. It's very hard to read.

Sub: #97 posted on Mon, 08/24/2009 - 12:46

mjohns54 mjohns54

(Posts: 26 | Credits: )

My bank won't do a deposit only. They said it is a debit and credit transaction checking. I cannot close this account. What else can I do?

Sub: #98 posted on Tue, 08/25/2009 - 09:53


I would go back to your bank and speak with someone else.. they really can put a hard block on it. honestly, it is best for you to close it out completely anyway but this account must be secured or they will drain it.

Sub: #99 posted on Tue, 08/25/2009 - 10:41

bea2ls bea2ls
(Posts: 3840 | Credits: )

i live in nc work is getting slow i have 2 pdl i already pay back the princal amount bank do i have to paid the rest

Sub: #100 posted on Thu, 09/03/2009 - 23:09


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