Laws Against Payday Loan Collection

Payday loans involve writing a check to a payday loan center in exchange for cash. If the check doesn't clear on the due date, collections begin. Payday loan debts are civil debts and collectors cannot pursue it as check fraud.

Criminal Action

Under the Fair Debt Collection Practices Act, payday loan collectors are not allowed to threaten a debtor with criminal charges because payday loans are civil debts and cannot be prosecuted by law enforcement.

Phone Contact

Payday collectors can only call debtors between 8:00 a.m. and 9:00 p.m. and cannot call on holidays or when their loan center is closed.

Bankruptcy

Once a debtor has hired a lawyer and begun filing for bankruptcy, a payday loan collector must stop collection practices.

Confidentiality

Payday loan collectors cannot give information about a debt to a debtor's employer, relatives or anyone not involved in the debt.

Additional Fees

According to the Federal Truth in Lending Act, payday loan collectors cannot threaten to attempt to charge fees in excess of the fees outlined in the original loan agreement.

References

• Federal Deposit Insurance Corporation
• Community Financial Services Association

Resources

• Consumer Federation of America Payday Loan Consumer Information