I Got This Email today from Paychecktoday.com

translated:we are not in this country therefore we cannot do anything but threaten.if you were to give a letter to your HR person revoking any wage assignments we would be screwed.as if were not now.all we can do is call and e-mail.if you paid back the principal we don't even have that to stand on.
anyway that is what sovreign nation means.

Yeah right, I've seen that email many times posted here by other members. Nope, your state law prevails.

lol@ Paul. :lol: :lol: :lol:

LMAO at Paul too, how funny are you???? You made me feel much better. I am so stressed at this time in my life a good laugh was needed. Thanks

glad to be of service.i noticed me and shazz posted around the same time.just took awhile,but i knew that wouldn't escape getting noticed.

I borrowed $300 and I have paid back $270. I just returned their emal and offered them $30 and I attached the consumer laws of AZ stating that they are bound by AZ Law. Now I will just sit and wait.

Sorry that was me Kfstaff that posted I forgot to log in. Anyway I will default on Friday, I hope all goes as planned. Do any of these companies really abide by the C & D letters?

Some do, some don't bother. The make take a few days to call, but eventually they will and they will all try to tell you that their law's prevail. If you can, just let the calls go to voicemail so you don't have to get into an arguement with them.

Agreed Dawn, Dont waste any more of your time there is no need to talk to them.

Paycheck Today has a deal with the Miami Tribe of Eastern Oklahoma. The tribe acts as the lender but Paycheck Today puts up the money and runs the operation. The idea is that federally recognized Indian tribes are treated as sovereign nations under the U.S. Constitution and are exempt from most state laws. California and Colorado are the only states that have seriously attacked lenders using this model, but both states are locked in an endless legal battle. No court has ruled on whether payday lending by Indian tribes is subject to any states laws, but there are hundreds of cases that say they are exempt from most other state laws.

I know we all like to throw out the "PDL's are illegal in my state and they must follow the borrower's state law" line in our posts but the fact is the jury is still very much out on that one. Only one court has ever ruled on that issue and all it said was that STATES could force out-of-state lenders (not Indian tribes or foreign lenders) to follow their laws. It did not say that private citizen borrowers had the same power. In fact, the Supreme Court held that even if payday loans are illegal in your state the lender can still take you to binding arbitration if it's in your contract - and the arbitrator (which the lender picked) gets to decide what law applies.

I wish folks would keep a few things in mind when they throw around legal opinions on the boards:

1) Not even the state attorney general gets to decide whether a payday loan is illegal in a state. The most he can do is sue the lender on behalf of the state and ask a court to make that decision. So far, very few have taken it that far.

2) Contract law favors the payday lenders. It's unintentional but notwithstanding some of the sillier comments I've read on the boards, the lenders are smart and hire even smarter lawyers. They build their contracts around principles that were adopted to help businesses in general - i.e., arbitration clauses, class action waivers, etc. - and make it very difficult for individual borrowers to even get a court to consider the question of whether a loan is legal.

3) The value of the advice given on these boards is not legal acumen. (Imagine, for example, going in front of a judge and saying "I shouldn't have to pay this loan because someone that calls himself 'Freaky Friday' said they were illegal.") The value is that complaints to the AG, the BBB and the FTC cause lenders to expend more time and resources than the loan is worth. Add to that the high cost of collecting a debt and it just isn't worth it for a Kansas City lender to bring legal action in Ohio or California or wherever, even in a lender-friendly arbitration forum.

4) If you borrowed money, most states require you to pay it back even if the lender isn't licensed. The only thing you can argue about is the interest, and whether payments you made before defaulting should be creditted to the principal you borrowed. And when I say "pay back", even unlicensed lenders can usually charge some interest - 10% in Texas, 6% in PA for example - just not the massive amounts found in pdl contracts. In fact, that's how the CSO model works in Texas, Maryland and Florida. A real lender makes you a loan at the maximum interest rate for an unlicensed lender and the local store charges a perfectly legal "brokering fee" equal to payday loan interest for (a) processing your application and (b) guaranteeing the loan to the real lender.

Sorry for the rant and I realize it's probably the wrong thread, but lately I've seen a lot of new members throwing around their version of the law as though it were carved into the 10 commandments. If it were as simple as they would have us believe - and as they unfortunately lead the people who turn to these boards for help to believe - no one would be in the pdl trap and there wouldn't be any need for this board.

I really appreciate and value your reply Freaky Friday, do you have any suggestions on how I should handle this particular company? I dont want to end up in some Indian jail in Oklahoma over a $300 loan that I owe $30 on and I dont mean that to be funny, I am serious. This whole process is stressful enough without the correct facts.

That was me Kstaff I forgot to log in.

You won't go to jail. You gave them an electronic debit authorization, not a check. Debits are governed by federal law, which applies to Indian tribes the same as they do to states.

BTW - I've looked up the court records on MTE several times using Lexis. Although they have been sued a number of times, they have NEVER sued anyone for defaulting on a payday loan. My guess is that the tribe can't sue you or take you to arbitration without waiving their immunity. (When you get sued you can file a counterclaim.) In other words, I think that the very thing that protects them from you keeps them prisoner on their reservation.

But even if I'm wrong about them waiving immunity, that would only help them if the tribe were legitimately running a pdl from their reservation. Remember, MTE is a sham. Paycheck Today operates from Pennsylvania. Just like United Cash Loans is really in Overland Park, Kansas and Ten Dollar Payday is in Colorado Springs (although both claim to be MTE lenders). The tribe just gets a piece of the fee to let money move through their bank accounts and to put their name on the loan documents. The last thing the real owners of these companies want is to put someone in a position to demand documents, depose their employees and expose the entire operation.

Am I correct in stating that Federal Law and Industry rules allow for the revocation of Electronic Funds transfers especially relating to Internet Payday Lenders? The Consumer Protection Act states that in order to stop the continued debit of ones account, as long as proper notice is given to your Financial Institution orally or in writing 3 days prior to the expected debit, by law your Financial Institution must comply and that you do not have to pay internet payday lenders by EFT?

This is how I am interpreting the laws of the FDIC and the Consumer Protection Act. Do you agree?

Thanks Freaky
Karin

My understanding of the Electronic Funds Transfer Act and NACHA rules is exactly the same as yours, kfstaff24. Not everyone agrees, though. For example, I know that CashNetUSA sends out a form letter prepared by its lawyers that says that the section of the EFTA that permits revocation does not apply to payday loans because pdl's are not structured as "recurring" debits.

But again, this is an area where practical reality trumps legal uncertainty. If you revoke authorization and the pdl's try to debit you (this includes "new" accounts if they find out about them) you can go to the bank and file a fraud affidavit. If you do this in a timely enough fashion, the bank has to act upon it and reverse the transaction through the federal reserve. Usually, any NSF charged are waived as well.

Theoretically, the pdl could try to fight it (i.e., by raising the same legal arguments that CashNetUSA's letter - which seems to just be a scare tactic - does) but few, if any, ever do. It's cheaper for them to turn the file over to their collections department than to pay their lawyers to fight over a few dollars.

Quote:

Whether we claim to be attorneys or not, the boards are full of posts interpreting state licensing statutes and advising people that their state laws trump the commerce clause of the U.S. Constitution. Even the Quick Payday court wasn't willing to go that far - all they said was the Kansas' particular law didn't offend the constitution and could be enforced - but we throw it out there as some sort of absolute fact.

Sorry, but I disagree with you Shazzers. All of us - me included - should be a lot more careful to stick to giving advice based on our own experiences and avoid giving out legal opinions.

I respect your opinion.

Erroneously charged me $29.00. Took forever to get to the agent Nicole. Was promised a refund, never happened. Took my debit card information to supposedly credit the amount then left me on hold for 20 minutes which I was then disconnected. A follow up call to her extension was never returned. Not only did I lose the $29.00 but another $27.00 in cell charges trying to get the situation fixed.

I respect Friday's opinion however I find that when people are giving advice they are trying to help the poster get the results they want. I just want to state to Friday is that ever since I been a member, the moderators always stated that it is your moral duty to pay the loan if payday lending is illegal in your home state. In my situation, I live in North Carolina where payday lending is illegal. I have offer all of lenders a chance to pay only the orginial amount borrowed and only two companies responded to my cease and desist letters. Arrowhead gave me a paid in full letter and the other is in the process of being paid off. I had one PDL to state that they were going to garnish my wages, which is against the law in the state of NC, (I got a letter from the attorney general's office to prove it) GFS have been a pain to work with and they call my place of employment 15-20 a day. My point is that the only people that can translate the law for you is an attorney and the attorney's general office, this forum is here to help people to get out of debt and get from under these companies that may or may not be operating legally in the US and Puerto Rico.