What Are My Legal Rights Against Payday Loan Companies?
If you are under threat of legal or financial action from a payday lender, know your consumer rights in order to protect your interests. These rights ensure the loan was lawfully administered and the collections process does not place you under undue financial hardship.
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Background
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Payday loan laws are made at the state level. Each state has separate regulations regarding these loans, and you can determine the laws in your state by visiting your state legislature's website.
Structure
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You may call into question the structure of your payday loans in order to determine if you are obligated to pay. For example, in Washington, you may only take out eight payday loans within a 12-month period. If your lender gave you an additional ninth loan, you may be absolved of payment. There are also legal restrictions that limit the size of a payday loan in many states. This sum is capped at a percentage of your income. If your lender exceeded this limit, the loan may also be deemed unlawful, and you may be absolved of payment obligations.
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Process
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You will have to dispute the lender's rights to collect from you in order to receive forgiveness of the loan. You can file a complaint with the state's consumer protection agency, take the lender to small claims court or file a written request with the lender to verify the legality of your loan.
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References
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