Payday loans in NJ

I found this posted by Goudah back in June...I hope it helps explain:

Posted: 13 Jun 2007 18:58


--------------------------------------------------------------------------------

NJ's laws are fairly weak in regards to payday loans . . . Since the laws refer specifically to check cashers, there are ways for companies to get around them. Several companies do the "fee" thing instead of charging "interest". So far NJ has let these companies skirt the laws . . . .

BTW - When calculating the 30% interest, you must remember that is for the whole year. You would only be paying for the amount of time between your pay periods. If it's 2 weeks, you would only be paying .011508% . . . Or you could take your loan amount, say $200. 200 * .30 = 60 So for the whole year you would only pay $60 in interest. You could divide that by 365. 60/365 = .164384, then times that by 14 (2 week pay period) .164384*14 = 2.301376 So is you were using the 30% cap, you would only owe $2.31 in interest.

But check with your banking dept and AG's office . . . . Most states do not consider these loans small loans and the rate cap does not apply to them. Most states will tell you that since these loans are prohibited you owe nothing in interest anyways.

I saw that before, but the question is: How do I stop the payments if I don't owe anything? We tried to stop payment at the bank. They just took a lump sum two days later. I've filed complaints with the better business bureau, NJ AG office, and I'm going to contact the AG offices in KS, OK and NM. I've overpaid over $1600 since June.

OK...you have to get your bank to put a hard debit block on any ach debits going out. Either that or find a way to close the account. Most of the time that is the only way to stop them from taking your money. I had Nationwide too and the wouldn't even talk to me until I defaulted...then I fought for the PIF because I too had overpaid.

Please follow Mornings advice and get your checking account under control. Please read this in regard to closing your account

Before you close your bank account due to payday loans eating away at your paycheck, please read this.

Some banks have a policy regarding ach transactions that allows them to force open closed accounts if any ach transactions go through within a certain time frame after the account is closed. This can leave you owing a legal bank $1,000's and reported to chexsystems, instead of owing barely legal (or not at all legal) payday loan companies. Not a good thing. Ask your bank what their policy is on ach transactions on closed accounts before you close the account. It's best to go in person and talk to a branch manager.

If your bank does have this policy, tell them your situation. Don't be embarrassed. Take letters with you showing that you have revoked authorization for each of your payday loan companies to debit your account. Tell the bank to put your account on deposit only, an ach block, or a hard hold before they close the account. Your bank can do one of those, don't take no for an answer. This will prevent any payday loan ach's from reopening the bank account.

It'a always best to close your bank account. Leaving it open gives ways for the payday loan companies to continue to take money out. These companies have many different dba's, so blocking them won't work. They will also produce paper checks and run them through your account. Closing the account is the best way to prevent these companies from taking money out of your account.

Some state laws do allow for prosecution if you close your bank account, but that is usually in cases of fraud. But it's always best to check with your state's attorney general or department of financial institution before you close your account. You want to make sure you are not causing more heacaches!

Please also read this thread:

http://www.debtconsolidationcare.com/paydayloan/close-account.html

It has some more information and other's experiences with dealing with the bank.