Unlicensed Payday Lender help requsted...
Date: Fri, 01/20/2012 - 18:31
I'm in California, and it is illegal in this state for a payday loan to be rolled over (paying the finance charge every two weeks, while the principal--the amount of your loan stays intact.
It is also illegal for payday lenders who aren't registered by the state to offer payday loans to residents of this state.
Finally, according to the Calif. Dept. of Corporations, the maximum amount of a payday loan for anybody that a lender may offer is $300.00, and the maximum finance charge is 15% of the loan
The fact that they're not registered or authorized to offer payday loans to California residents, as well as the fact that their practice of 'rolling over' the loan is also illegal, leads me to believe that I'm due for a refund if the total amount of my cumulative bi-weekly finance charges exceed the amount of the loan.
Hypothetical example--I take out a PDL online from a lender not authorized to do business in California for, say $300.00, with a finance charge of $60.00 (which is 20%, 5% higher than the state limit of $15) which is deducted from my checking account every two weeks. If they 'roll over' the loan five times and collect the $60.00 finance charge each time, that's $300.00, the amount of the original loan.
However, 15% of $300.00 is $45.00, which if the loan is rolled over five times, comes to $225.00.
Since the amount of my loan was $300.00, do they not owe me a $75.00 refund?
If I send them a copy of the letter posted in the 'sticky' post at the top of this 'Payday Loan Help' thread informing them of their TWO violations of California law, am I correct that they have no recourse against me, since their $300.00 loan has now been paid in full via my 5 interest payments of $60.00.
I hope I understood that 'sticky' post correctly---thanks!
It is also illegal for payday lenders who aren't registered by the state to offer payday loans to residents of this state.
Finally, according to the Calif. Dept. of Corporations, the maximum amount of a payday loan for anybody that a lender may offer is $300.00, and the maximum finance charge is 15% of the loan
The fact that they're not registered or authorized to offer payday loans to California residents, as well as the fact that their practice of 'rolling over' the loan is also illegal, leads me to believe that I'm due for a refund if the total amount of my cumulative bi-weekly finance charges exceed the amount of the loan.
Hypothetical example--I take out a PDL online from a lender not authorized to do business in California for, say $300.00, with a finance charge of $60.00 (which is 20%, 5% higher than the state limit of $15) which is deducted from my checking account every two weeks. If they 'roll over' the loan five times and collect the $60.00 finance charge each time, that's $300.00, the amount of the original loan.
However, 15% of $300.00 is $45.00, which if the loan is rolled over five times, comes to $225.00.
Since the amount of my loan was $300.00, do they not owe me a $75.00 refund?
If I send them a copy of the letter posted in the 'sticky' post at the top of this 'Payday Loan Help' thread informing them of their TWO violations of California law, am I correct that they have no recourse against me, since their $300.00 loan has now been paid in full via my 5 interest payments of $60.00.
I hope I understood that 'sticky' post correctly---thanks!
If the lender is not authorized to do business in California, th
If the lender is not authorized to do business in California, then you're only required to pay back the principal amount i.e., $300. Basically, you don't have to pay the finance charges or fees or interests. The payday loan company will have no recourse against you since the principal amount has been paid in full.
