Illegal PDL and ACH reversal

Good luck! I'm anxious to here other opinions....

apparently someone has done this, the PDL wasn't happy though.

debtconsolidationcare.com/paydayloan/cashminutes-lta.html

I'm thinking this is how i'm gonna move forward... call bofa, make them unauthorized, F*** u paydaymax.com

Has anybody been able to reverse the ACH transactions with any other banks? I would love to know if I can do this with mine!

There is a fine line when it comes to ACH reversals regarding PDLs. If you have overpaid the principal you should try and send a demand letter for a refund. IMO, I would not reverse all transactions with the bank. I know it is possible, but others here have done it and it has not turned out very questionable :?

Definately ask for a refund on the overpaid principal.

i did fax a demand letter for a refund... two days ago. they locked out my account online so i'm fairly confident they got it. in any event, from what i've gathered from other's posts here it seems highly unlikely they'll give me a refund and I'm predicting a week from Friday they'll still attempt to collect unless i close my account and go through all the motions as advised here. I'm not keen on doing that given i have a few checks in the ether at this time (i wont have a problem covering them but it will be a massive headache to coordinate everything with a new acct).

I am considering sending another fax and/or calling to clarify why my account has been locked and will reiterate my demands at that time... I am putting together all the paperwork to complain to the BBB, NYSBD (Im in NY) etc. I was fortunate enough to consult this site prior to issuing my 1st demand letter, so i saved pdfs of my statements and all the materials to avoid losing documentation after the lock out (these include those stating the loans originate from the british west indies). I figure this does give me an edge if I did want to take this to the bank... according to Fed reserve E-cfr and NY law, this is easily an unauthorized transaction as the contract which authorized the ACH was null and void given PDM's lack of proper licensing for the state of NY.

With this in mind, I feel any communication with PDM should stress my intent to escalate complaints to the highest level of the NYSBD, which would threaten their ability to do business in this state (they've been run out of other states, as evident from the list of states posted on their site they wont lend to). Perhaps this would grease the proverbial wheels on their part? Losing a state like NY (with all of NYC included) would cost PDM much more than the 1200 they owe me.

Still, I'm growing fonder of the idea of simply reversing the transactions (at least enough to equal 1200) and letting my bank and its ACH do the dirty work... If i coordinate this with written notification of my actions and a stern warning not to contact me, my references, and my work (which i already made in my first demand letter) do you think it would be imposing enough to make them back off? I sure do...

does anyone have links other than the one i have in this forum describing what has happened when people get the bank involved?

PS i figure i wouldnt want to goto a branch and would rather call as that way i could get to a dept dedicated to reversals/chargebacks? Seems the in-person approach, while potentially more persuasive from a sympathy standpoint, would be slower, more stressful, and would ultimately lead to the same people... any thoughts?

I did ask for a refund in my letters, but I have one, High Country/Rocky Boy, that is saying that I still owe them the principal on a second loan when I paid them enough on the first one to cover both and then some! So I was wondering about reversing the transactions to get some of my money back from them because they are probably not going to play ball and give me a refund.

ya i really doubt they'll work with me on this... probably just a waste of time. My PDL is totally illegal/overseas so i doubt they'll be able to get my bank to doubt me...

I have started the process with my bank - just on those companies that I have not heard anything from. The ones that have given me a PIF, but not a refund, I am leaving alone. I got the PIF, that is fine. And my bank can only go back so far, so it's not going to be every transaction and definitely not close to the overpayment amounts. So we'll see how it goes!

By the way, the girl in my bank's fraud department that I spoke to, asked for the information to get rid of PDL's. She says that she has many people call every day that have problems with this, so I gave her the site address. Told her it was the best place to get help for PDL's.

really- what bank do you use? they have been receptive to the idea? let me know what happens!

I use BB&T. I'm hoping that because it isn't every transaction, just the last three, and not anywhere close to what I have overpaid that the PDL's don't try anything else. I am working on the premise that since their loans were illegal in my state to start off with, then any authorization I gave is null and void, and therefore I can revoke the authorization and reverse the transactions for those specific ones.

Where did you get the idea that because the loan was illegal (assuming this is true in the absence of a ruling from a court) that the contract is void, your ACH agreement is void, etc.?

It wasn't so long ago that a class action attorney in Florida took the position that since pdl contracts made before they started licensing lenders were illegal, it automatically followed that arbitration agreements with those lenders were also illegal and he should be able to recover millions of dollars for his clients, etc. He even convinced the Florida Supreme Court that he was right. The U.S. Supreme Court completely disagreed and slapped the Florida Supreme Court, the class action attorney and all those clients pretty good. They decided the arbitration agreement was legal and that it was up to the arbitrator (who by the way was picked by the pdl) to decide whether the agreement was legal and not even a Florida court had the power to void the loan agreement.

Don't take my word for it, BTW. The case is Cardegna vs. Buckeye Check Cashing and the decision came down in February 2007.

This case was for a storefront operation - not an internet one. And all pdl's are illegal in my state. I have revoked my authorization and am only going to reverse the last three transactions on loans that have been grossly overpaid to begin with. I am not going for all that I have overpaid and not on every loan - the ones that have already responded I am leaving alone. The ones that I still owe small amounts to, I am leaving alone. And I have not defaulted on any of them and there is no arbitration agreement. If problems arise, I will let you all know -

interesting. my pdl is notoriously nasty so I'm curious to see what will transpire. I've also prepared to reverse a fraction of the transactions, which is small enough that I've still PIF + interest to the PDL. I've made this clear in a stern manner in a couple of faxes- two so far in the past 7 days and no response whatsoever. my account is still blocked and i haven't defaulted yet- but I expect they'll try to extract money from my account come friday. My deadline for communication is tomorrow (thursday) and if they still havent gotten back I'll be going to the bank, requesting a reversal (which will require me to file an affidavit), and putting a debit block on my account.

frankly, I really can't afford to pay them more and given that i've paid 1300 dollars over the principal, i have a hard time swallowing any of it and if they wont settle with me, im reversing some of it. I am a bit concerned about the retaliation in terms of getting my office called or my references called. My work is a pretty much your standard NYC corporation, so it could be really ugly.... ugh not sure what to do here! very conflicted

Facts of the Case:

John Cardegna signed a contract for a loan from Buckeye Check Cashing. The contract contained a clause in which Cardegna agreed to resolve any controversies over the loan through arbitration. Cardegna later sued Buckeye, claiming that the conditions for the loan stipulated by the contract were illegal. Buckeye filed a motion in Florida district court to have the case resolved by arbitration, as required by the contract. Cardegna countered that the contract as a whole was illegal and that the arbitration clause was therefore not enforceable. The court agreed and ruled for Cardegna.

On appeal, the state appeals court reversed, holding that the Federal Arbitration Act, as interpreted by the U.S. Supreme Court, allows arbitration clauses to be enforced even if they are part of otherwise invalid contracts. The appeals court relied on the U.S. Supreme Court's decision in Prima Paint Corporation v. Flood & Conklin Manufacturing Company. The Florida Supreme Court disagreed with the appeals court's use of Prima Paint, however, because the contract in that case had been merely voidable, while the contract in Cardegna's case was actually illegal. The Florida Supreme Court therefore reversed, ruling in favor of Cardegna.

Question:

Under the Federal Arbitration Act, may a party avoid arbitration by arguing that the contract in which the arbitration clause is contained is illegal?
Conclusion:

No. The 7-1 majority (Justice Samuel Alito not participating) ruled that challenges to the legality of a contract as a whole must be argued before the arbitrator rather than a court.

Per Guest"My work is a pretty much your standard NYC corporation, so it could be really ugly.... ugh not sure what to do here! very conflicted "
I'm in same boat!!!! Hope all works out keep us posted!

I guess from now on we need to add the statement in our revocation letters that we also revoke all agreements to arbitration on the contract.

okay folks.... i dove into the rabbit hole this afternoon. Paydaymax has not responsed to any of my requests and my waiting period has expired. I called of BofA and am disputing about 750 dollars in transactions- an amount roughly equal to the settlement offer. This still leaves me PIF on the principal plus interest, and the guy at bofa claims said they could only look back 60 days, which eliminates the potential to reverse any others.

So I have to do an affidavit and fax that, at which point they'll give me a provisional credit as the investigation proceeds forward.

The guy i talked to was very nice and seemed like a straight-shooter. Told me he gets PDL calls ALL THE TIME. most importantly, I asked him what my chances of success are--he told me that the provisional credit rarely gets denied. Also, he remarked that in most cases of ACH reversals, the PDL does not even respond... meaning bofa will default their decision in my favor.

So I gotta fill out my affidavit, should take up to a week to get money back, but I'm glad i did this all around.

Now all i gotta do is wait and see how my pdl reacts to all this.... if at all! PDM is notoriously vicious with non-payment... but i hope they'll see the light on this one and just leave it alone. Im guessing pressure from the BBB and my bank will probably scare them off.

You might also send a complaint to your state's Attorney General or Dept. of Justice - they will also send a letter to the PDL - at least I know that NC will and if PDL's are illegal in your state than they probably will too

good idea. don't know how many people are following this thread, but I feel like anyone and everyone in our situation needs to do this. If we all begin to put the screws to these companies, they will simply bend and break under the pressure of it all. Eventually, their ACH processor (who deals as the intermediary between your bank and the PDL in a reversal procedure) will drop them as clients or worse... report them and get them banned altogether.

Any admin out there up for putting together a sticky on illegal online PDLs and ach reversals? as i said, my bank (bofa, which is notoriously miserable to everyone) was actually very receptive to my problem and said they do this ALL THE TIME. They also said its rare for any online pdl to respond to or dispute the chargeback, meaning a default decision on the consumers behalf.

this idea should not die with this thread, and the visitors of this sit should be aware of all options available to them when dealing with Illegal, online PDLS.

I too am filing a dispute for ACH debits that were taken out of my account under the same premise. The loans were illegal and therefore any collection on those loans is void. You can't enforce an illegal contract. With the above court case sited and it being a storefront operation, I wonder if it would make a difference if it was done by internet PDL's. Especially ones that are out of courntry? One of the debits I am disputing is with ZIP 19 which isn't even in the US. The other's are Paydayloan Yes, Amerilaon (who CA issued a Cease and Refrain Order) and Spotya. I am very interested in knowing what occurrs with your dispute and how the companies respond.

Ok, found out from my bank today that any debits made to my account before my revocation cannot be reversed. If they happened after my revocation, they could be, but my bank will not do it for ones made before that date. Really a bummer! Was hoping to stick it to some of these companies that refuse to give me a PIF and make threatening phone calls.

quick update- I was able to get all the money i requested back from BofA. They reversed 5 transactions totaling around 750 dollars altogether. PDL has not contacted me or attempted to debit my account.

so far so good!